Probe of Corinthian Colleges Widens

Times Staff Writers

State investigators have widened their investigation of Corinthian Colleges Inc., a move that could force the Santa Ana-based vocational school operator to close campuses in California, the company said Friday.

The California attorney general’s office, which has been investigating job-placement claims involving three of the chain’s schools, has requested documents related to Corinthian’s 18 campuses in the state, said Chief Executive Jack Massimino during a telephone conference announcing the company’s fourth-quarter performance.

If regulators find that Corinthian illegally inflated the number of graduates finding jobs, the chain could be forced to shutter campuses in California, Massimino said. But he added that “we haven’t seen that happen in this industry in this state.”

The firm could also face fines and other penalties, he said.


The attorney general’s office said Friday that it could not comment on investigations, but two years ago officials said the agency was examining Corinthian as part of a broad look into industry practices.

Job placement is a key selling point for vocational schools, which cater to students looking for certification in professional fields, such as nursing, rather than a degree from a traditional four-year college.

Corinthian operates the National Institute of Technology in Long Beach, Everest College in Ontario and about a dozen Bryman colleges statewide. About 65,000 students attend 131 Corinthian schools in the U.S. and Canada.

On Friday, the company said it placed 82% of graduates, or 38,362, in jobs in 2005, up from 79% the year before.

In California, schools have to truthfully report such numbers to keep operating licenses. The attorney general is examining how Corinthian calculates those numbers and whether its California campuses are meeting minimum requirements for placing graduates in jobs.

Many Corinthian students said they were not aware of the state investigation.

“They say they help us out -- giving us links, helping us with our resumes,” said Oscar Flores, a 19-year-old student in the pharmacy technician training program at Bryman College in Los Angeles. “They have a 90% placement rate -- everybody seems to get a job.”

Danielle Green, 19, who is training to be a medical assistant, said she used to work in the college’s job placement office.

“No one had trouble getting jobs,” she said. “People would put in their resumes and get interviews the same day.”

On Friday, Massimino seemed to blame arcane state regulations for the scrutiny.

“California’s method for calculating placement statistics is unique,” he told analysts. “It differs from accrediting-agency standards and the standards of any other state.”

Massimino said the company continued to cooperate with the investigation.

There are about 1,500 job training schools in California serving about 400,000 students, according to the state Bureau for Private Postsecondary and Vocational Education.

Closures for violations of the law are rare, said Miles Bristow, a spokesman for the bureau.

The attorney general’s probe is the latest in a string of bad news for Corinthian in recent years. Students in California and Florida have sued the company, alleging that they were misled to believe they were earning transferable college credits. Federal officials have found violations of student loan application rules at the San Jose campus. On Friday, the company said the Securities and Exchange Commission was reviewing its option grants.

Corinthian shares dropped $1.04 to $10.81. Earnings for the company’s fiscal fourth quarter, ended June 30, were 13 cents a share, matching analysts’ estimates.