A senior official in the California attorney general's office said Monday that the state would sue Corinthian Colleges by the end of the month if the large trade school chain does not agree to settle allegations that it misled prospective students by exaggerating its ability to place them in good-paying jobs.
Al Shelden, senior assistant attorney general of the Consumer Law Section, spoke in an interview Monday just hours after Rep. Maxine Waters (D-Los Angeles) and a veteran legal aid lawyer, at a news conference, called on state Atty. Gen. Jerry Brown to sue Corinthian for fraud and other violations of California law.
Corinthian, which is based in Santa Ana and has 94 campuses nationwide including 18 in California, acknowledged in a U.S. Securities and Exchange Commission filing last November that the state attorney general's office said it "appeared that" the company's advertising, marketing and sale of its programs violated the California Business and Professions Code and the California Education Code.
In addition, Corinthian disclosed that the state attorney general's office "believed" that the way it calculated job placement rates promised to students violated state laws. Moreover, Corinthian said it had been informed by the state's lawyers that its placement rates for some of its degree-granting programs failed to meet minimum California requirements.
"We are looking at getting good relief for consumers," Shelden said. He said he could not discuss the negotiations but made it clear that any settlement would include refunding money to students who believed they did not get what they were promised, fines and an injunction presented to a judge.
"We have never entered into any private or secret settlement" Shelden said.
Waters, then a state legislator, authored a bill in 1989 making it illegal for schools to make false promises about how their training would lead to high-paying jobs.
Elena Ackel, the legal aid attorney who appeared at the news conference with Waters, said the attorney general's office was set to file suit against Corinthian on June 7, but after lobbying by attorneys from Manatt, Phelps & Philips, Brown intervened and called a halt. Attorneys at the Los Angeles law firm contributed $28,000 to Brown in his campaign for attorney general, Ackel said, citing state records.
Shelden said Monday, "I have not felt any pressure on high" and that he saw no sign that Brown had gone around the line lawyers in the case. Shelden also said that attorneys from Manatt Phelps "have been working very hard with us to reach resolution."
Manatt Phelps had no immediate comment. One of the firm's attorneys, however, noted that the homepage of the Legal Aid Foundation of Los Angeles' website praised the firm for work it did on behalf of a disabled woman whose husband had abandoned her.
Manatt Phelps' website includes a long list of free services provided to low-income people needing help with a variety of legal needs, including civil rights, domestic violence prevention, and veterans benefits.
Anna Marie Dunlap, a spokesman for Corinthian, wrote in an e-mail on Monday that the company has "cooperated fully with the California AG's office for the past three years, and are currently engaged in settlement discussions with them. We are fully committed to providing quality education and job placement services for students and to being in compliance with state law and regulations."
At the Legal Aid news conference, held at its Crenshaw Boulevard office, however, Mimi Enadeghe, a Long Beach resident, said she was the victim of a "bait and switch" by Bryman College, a Corinthian subsidiary. The situation left her $13,000 in debt and without the training she had been promised, she said.
In October 2004, Enadeghe, at the time an assistant manager at a Radio Shack in Long Beach, said she saw an advertisement on TV for an X-ray technician course at Bryman. Enadeghe called the school and was directed to Bryman's City of Industry campus, which school officials said was the only branch offering the X-ray technician course, she said.
There, Enadeghe said, a Bryman administrator named Diane told her that she would first have to take a medical assistant course as a prerequisite to the X-ray technician program.
Enadeghe said she already was making more than a medical assistant but decided it would be worth taking that class in order to be able to take the one for X-ray training. "That appealed to me because I like working with technology," she said.
Eight months later, during the last week of her medical assistant course, Enadeghe said, she and a number of other students in her program were told that the X-ray technician course had been canceled.
She then protested to Diane and to the head of Bryman's City of Industry branch, but to no avail. "They gave me the runaround. I feel like they treated me poorly and took advantage of me," said Enadeghe, 27, who now works as a receptionist at a law firm. She is planning to sue the school for fraud and other violations of California law, she said.
Corinthian spokeswoman Dunlap said that the school had offered to help Enadeghe enroll in another school with an X-ray program but that she did not accept the offer.
Four other students also appeared at the news conference and said they had been deceived by other vocational schools. Waters said the student's stories proved that the problems she attempted to address years ago persist, and she called on state legislators to reauthorize the consumer protections on trade schools that expired Saturday.