All Four Crown Officers Convicted

Well, its been awhile, and a great deal has happened in the Crown College financial aid theft case. All of the defendants are guilty, two of them, Misty Lee and Sheila Mullineaux plead guilty and have been sentenced, however, Jennifer Beyers and Jessica McMullin declined plea offers and took their chances at trial, and were convicted on July 14, 2011 on all the charges. Now, how they thought that they could win at trial is beyond me and one would hope that they would face serious consequences because of their Peter Pan thoughts that they were someone not guilty and the fact that four days of court time was wasted. But their sentencing has been moved to November to a date to be announced.

Crown College Financial Fraud Case Update

There are many developments in the Crown College Financial Fraud indictment of the four former officers of Crown College. On July 26, 2010, Misty Lee pleaded guilty to counts 1 and 2 of the indictment pursuant to a plea agreement with the government which was sealed. The minute order of the hearing is here:

Minute Entry for proceedings held before Judge Karen L Strombom- CRD: Traci Whiteley; AUSA: Nick Brown; Def Cnsl: Colin Fieman; PTS: Todd Skipworth; Time of Hearing: 11:30; Courtroom: F; Session #: TAC100726 (SEALED); INITIAL APPEARANCE AND PLEA (via video conference) as to Misty Lee held on 7/26/2010. At the request of the defense and with agreement from the government, the Defendant is present via video conference from the Clerk's Office of the US District Court for the District of Kansas at Topeka. Defendant placed under oath and advised of rights/charges/ penalties; Defendant executes Consent to Rule 11 Plea in a felony case before a U.S. Magistrate Judge; Education = 2 yrs college; Court reviews the plea agreement; Pleas guilty to counts 1 and 2; Remaining Count to be dismissed at sentencing. Court finds the Defendant is competent to enter a guilty plea; Court signs the Report and Recommendation and Counsel have fourteen days to file objections; Court orders the preparation of a Presentence Report. Defendant remains "at liberty."

Sentencing set for 10/15/2010 at 10:30 AM in A Courtroom before Judge Robert J. Bryan. (TW)

Well the Misty Lee's sentencing was continued until the rest of the defendants could enter the pleas or go to trial and then followed a great deal of postponements as the defendants and prosecutors Next Sheila Mullineaux plead guilty and was sentenced because, apparently, she was not going to testify against the other defendants.

Crown College Ex-Officers Steal from You

As most are aware, Crown College ex-officers, former vice president, Sheila Mullineaux; the college's admissions director and registrar, Jesica McMullin; and financial aid director Misty Lee, and Jennifer Byers, the fiscal manager and bookkeeper were indicted by a federal court. Their arraignment was set continued from May 28 to June 11, 2010. On June 11, 2010 only Jesica McMullin appeared. The clerk clerk stated that the U.S. Attorney's office was inquiring as to whether they had received notice of the arraignment before taking further action.

This indictment will most likely not be news to many of the unfortunate students not to mention the even more unfortunate taxpayers. Actually one could argue, and I do, that Crown College and their staff have allegedly been stealing from the federal government for some time which is what happens when you lie to students about the transferability of credits. Those students do not receive the education they bargain for and are stuck in place and have wasted the taxpayers' money or they must continue their education in another school, again in determent to the taxpayer.

In reality, if these ex-officers are guilty, what they have done is simply dispense with the middle man, i.e., the students and stuck their hands directly into the public till. You see, the federal government and you gentle taxpayer fund higher education and for-profit schools through the grants and federal loans. Yes, the student is responsible, however, since the federal government guaranteed the loan, the taxpayer is on the hook.

Crown College Former Officers Indicted

Well as the Seattle PI reported four former Crown College officers were indicted for financial aid fraud. This would include almost the entire office staff: former vice president, Sheila Mullineaux; the college's admissions director and registrar, Jesica McMullin; and financial aid director Misty Lee and Jennifer Byers, the fiscal manager and bookkeeper. Well, it took three years, but justice has never been known for its speed and the truth is easily obscured and obfuscated. Crown College was always been a business and that trumped every other consideration, including educating and honesty. Most people think accreditation is accreditation. Unfortunately, it is not. There is national accreditation, which is basically conferred to vocational, career schools and regional accreditation which is conferred on academic institutions. In many cases, the credits don't mix, i.e., most academic institutions do not accept credits from Crown College and other nationally accredited schools. Now there is quite a debate as to whether this is fair or not, however, that issue never excused Crown College from being honest with their students. Instead, they complained about the unfairness of regional accredited schools not accepting their credits for transfer while at the same time, telling their students, that Crown's colleges credits transferred. No problem.

Let's take a trip back in time. Crown College's success and even existence was always intricately tied to the ability of its staff to convince students that its credits were transferable to academic institutions. So they lied to students, bold faced lies, and they were able to get away with it, for a long time.

Each of these former officers, that have been charged by the federal grand jury lied to students in order to keep Crown College in the black and in fact it brought in $4,000,000 at its zenith. Your tax money boys and girls, since the money comes from the federal government. As far back as 1997 a complaint was filed against Crown College complaining that that credits that Crown College officials stated would transfer did not. Lola Jackson finally brought a case against Crown College and they finally settled out of court. However, Latisha Gonzalez filed a lawsuit and then a class action lawsuit was filed and then the media became involved. John Wabel, who basically was Crown College, had no choice but to stake his entire reputation on defeating the Gonzalez suit. It's amazing to see how he refuses to even accept the possibility that his administrators could lie, which, of course it appears that they did.

The publicity generated by the class action lawsuit exposed Crown College's practice of lying about the transferability of their credits and then, after an epic judicial struggle, Crown College lost the Gonzalez lawsuit, was saddled with paying Gonzalez's attorneys $70,000 and an injunction which prohibited them from deceiving students. They settled a second law suit for $70,000 and then hoped to resume their "business" practices. However, stuffing a cat back into a bag is no mean task, especially with the indelible stain that the internet can leave, but I'm mixing metaphors. Suffice to say, that once students realized that the Crown College's credits did not transfer, they no longer wished to pay the premium fee to attend it. Community colleges were a much better deal.

Crown College was never able to recover despite an influx of money and a new round of advertisements. It was already all over the internet that the school's credits did not transfer. Thus, it was clear it was going to close and that is when these officers hatched this scheme.

For profit schools make money off the government

According to the article in MSNBC above, for profit schools loan money to students who they know will default on those loans. Amazing, huh? I mean these are not some kind of "ineffective" governmental program or non-profit, starry eyed organization bent on helping students notwithstanding other considerations, such as making money! Well, for profit schools make money whether or not students learn or pay back their student loans. In most cases the federal and/or state government pays them either directly in tuition reimbursements or indirectly by "loaning" the students the money to attend these schools. Consequently, so when the endeavor to loan the money themselves, even knowing they may not get it back, its like losing to win!

Regulation of California Vocational Schools

In 2007, the Bureau for Private Postsecondary and Vocational Education agency which once regulated California's vocational/trade/career schools ceased to exist, when the legislation which authorized it was allowed to slide, unimpeded, off the book of laws when the legislature failed to renew it. The Bureau was disdained by the schools it regulated and consumer advocates alike. Since that time California's career schools have been under only voluntary regulations and attempts to pass a new law, specifically SB 823, have been unsuccessful as career schools felt the proposed law was too strict.

Now another law, AB 48, has been proposed. The Consumer Federation of California has proposed much needed reforms to the proposed law.

Transfer of credits is one of the most important ones. Credits earned at these career institutions are very seldom taken by regional accredited universities. In own study performed by the career schools themselves, only 18% were taken. Career schools have complained long and hard about this situation and even tried to force the federal government to mandate that their credits would transfer, however, generally, their course work is geared toward preparing students for careers and not academic proficiency thus, they are though to be inferior. Without regards to the merits of this argument, that is the present reality and students need to be made aware of this fact. However, the fact that a career school education is not necessarily portable to a regionally accredited school, is detrimental to its marketability thus for-profit schools wish to obscure this fact. Careers schools should be forced to divulge this information in the enrollment agreement in no uncertain terms.

Alen Janish & CRI - How To Have Access to Federal Aid and Spend it Too

Most of you are aware of CRI and the way it masqueraded as a viable court reporting school when in sobering reality it was merely a vessel to enrich the clever cronies who had ventured upon a clever scheme to separate vulnerable students from government money. Yes, government money. Strange is it not? If its government money, why does it belong to the students you might inquire? Well it belongs to the students because its the students who end up having to pay it back...and that's forever!

Actually Janisch was a bit more advanced than many of the unscrupulous school operators out there. He managed to swindle not just the students but the Department of Education itself, actually not that difficult. The Dept. of Education has a requirement that a school must meet certain financial standards in order to participate in the financial aid program which is literally the lifeblood of any proprietary school since the students do not pay the tuition for most of these schools, they just have to pay the tuition back. Janisch, in order to meet this requirement, engaged in a version of Three Card Monty, with his finances and those of two of his cohorts or elves if you will. The Dept. of Education requirements are not difficult to anticipate inasmuch as they appear at the end of the year regularly, a bit like Santa Claus. Thus, if a school has enough money at the time the DOE checks their finances then they are good to go. Its as if Santa Clause only checks if you're naughty or nice at the end of the year, ignoring your behavior during the rest of it. Read the summary judgment in the CRI bankruptcy case to get an overview of how this worked.

So Janisch, made sure that he had enough money, jewelry, letters of credit, or whatever negotiable instrument he could locate to satisfy the DOE's predictable journey through his books and then as soon as they turned the corner, simply repatriated what ever collateral his friends had loaned him and went on on about his crooked business.