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California Sues Major For-Profit College

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By William Vogeler, Esq. on December 04, 2017 5:59 AM

Behind every lawsuit, there is a true story.

It may not be apparent in the complaint, but it drives the litigation. In People of the State of California v. Ashford University, the real story starts with the second defendant named in the caption: Bridgeport Education, Inc.

Bridgeport owns the private university, which rocketed to $120 million in profits annually in ten years. State Attorney General Xavier Becerra says the defendants defrauded students.

"Army" of Salespeople

In a statement, Becerra said the university lied about graduation statistics and charged exhoribant fees. He said an "army" of salespeople "preyed on veterans and people of modest means."

"This for-profit college illegally misled students about their educational prospects and unfairly saddled them with debt," he said.

A former Bridgeport supervisor, quoted in the complaint, said they publicly embarrassed failing salespeople to drive recruits.

"In short, the sales floor had a true boiler-room atmosphere, which reminds me in many ways of the boiler rooms portrayed in the movie 'The Wolf of Wall Street,'" the anonymous supervisor said.

Bridgeport Connection

According to reports, the lawsuit comes as the Trump administration is trying to roll back regulations on for-profit colleges. Critics have pointed out that Education Secretary Betsy DeVos hired a special assistant who is also a Bridgeport executive.

The Courthouse News said that Robert Eitel, one of the Bridgeport's top lawyers, has defended the company in "a host of investigations and lawsuits." Bridgeport settled a Consumer Financial Protection Bureau investigation and agreed to pay back $23.5 million in student loans as well as an $8 million fine.

Eitel may not defend the company in the California lawsuit, however. It apparently creates a conflict of interest, if not an ethical issue.

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