On April 27, 2021, Dorothy McCarty, a financial aid advisor at Independence University, an online career college, met via Zoom with investigators from the United States Department of Education to discuss what McCarty considered to be unethical abuses of students, largely low-income people, by the school, which was owned by the Utah-based non-profit Center for Excellence in Higher Education (CEHE).

Soon after, McCarty, who is Black and nonbinary and uses they / them pronouns, received a threat. 

On the night of May 1, McCarty got a text message, from a number not known to them, reading, “Did you think we wouldn’t find out what you did?”

When two of McCarty’s friends, at their request, subsequently texted the number, additional ominous messages came in response. One friend was told, “Your [sic] not involved yet. Keep it that way. She knows what she did.” The other friend texted “What’s tea sis?!” with a laughter emoji to the number, and heard back, “You should ask Dorothy. She likes to share vital information with various sources.”

On August 1, 2021, McCarty, along with many of their colleagues, was terminated from Independence, after a Colorado judge had ruled that CEHE had engaged in deceptions, the school had lost its accreditation, and the U.S. Department of Education restricted access to federal aid dollars. Their supervisor said the school had run out of money.

Independence and the other CEHE schools, which had already shuttered, had received $2 billion or more in federal student grants and loans over a decade. Now the schools were gone. The remaining 7000 students faced an uncertain future. Within hours, the company computers McCarty logged into from home had shut down access. 

On Oct 7, 2021, McCarty received a text message, from a different unknown number, stating, “Just wanted to remind you we didn’t forget.” Then came two photos of McCarty’s place of residence in Copperas Cove, Texas, where they lived alone and to where they had moved that year from California, and of their vehicle, seemingly taken from their driveway. The implication was clear: We not only know where you live, we’re right outside your home. When McCarty, understandably concerned, texted back to the number, “ok well the police will be here soon,” they got the following text in response: “With all the lives you’ve ruined you will need more then [sic] the police.” 

 

And then the unknown texter sent a picture of a dog that was unconscious, perhaps dead, on the ground. The dog resembled McCarty’s own pet. McCarty adored their two dogs, one of whom died in September 2020. That loss had hit McCarty hard. At the time, they told their supervisor at CEHE about their attachment to the dog and the difficulties they were experiencing, to explain why they took off a few days from work.

McCarty called the police, and soon an officer was dispatched to take a statement. McCarty decided to spend the night at a friend’s home.

A few days later McCarty gave a statement about the threats to federal agents.

CEHE’s downward spiral

The college where McCarty worked had by then collapsed under the weight of the kind of evidence that McCarty had provided to the Department — evidence that CEHE and Independence had been deceiving, over-charging, and under-educating its students. 

In August 2020, following an extensive trial, a Colorado state court had sided with that state’s attorney general and found CEHE, its CollegeAmerica school, and top executives Carl Barney and Eric Juhlin liable for deceptive practices and awarded a $3 million judgment. In April 2021, Independence’s accreditor, ACCSC, ended its approval of Independence, which by then was CEHE’s main school, effectively repealing its eligibility for federal student grants and loans. Soon after, the U.S. Department of Education restricted the flow of such aid. In the wake of those developments, CEHE shut down classes and laid off most staff.

CEHE is still trying in court to undo these setbacks. In October 2022, CEHE sued in Virginia federal district court to overturn an arbitration decision upholding ACCSC’s revocation of accreditation. Both CEHE and the Colorado attorney general are now also appealing aspects of the state lawsuit to the Colorado Supreme Court.

But CEHE is facing additional legal challenges. The U.S. Justice Department is moving ahead with a long-pending lawsuit in which it has joined whistleblowers in pursuing False Claims Act fraud charges against CEHE. The federal Consumer Financial Protection Bureau has been pursuing a separate investigation into CEHE’s private loan practices.

CEHE, despite the probes, bad publicity, and collapse of its schools, has continued trying to collect the high-interest private loan debt it created for its broke former students.

And CEHE has continued to portray itself as a victim of a political conspiracy against it, with ongoing vitriol on Twitter from former CEO Eric Juhlin, whom the Department of Education took the rare step of suspending from federal contracting. More attacks on CEHE critics, and the Colorado attorney general office and court, have come, including on his personal blog, from billionaire founder Carl Barney, who used clever lawyers and accountants to keep making big money off the CEHE schools even after he converted them to non-profit status.

In addition, in recent years numerous pundits and consultants for hire have published, on conservative media outlets and at least one dedicated website, attacks on critics of predatory colleges, repeating long-debunked lies that those critics (including me) are financially connected to Wall Street investors who bet against for-profit college stocks. It’s obvious that these screeds are drawn from the same set of talking points and are financed by some wounded actor or actors in the career college industry. Some of these essays have specifically defended CEHE and its CollegeAmerica chain.

Last month, CEHE took its grievance campaign to a new low by suing the United States government for $500 million in the U.S. Court of Claims, asserting, as a press release statement by Juhlin contended, that the Department of Education “in coordination with ideological confederates… has been on a campaign to cripple and close as many private career colleges as possible” and that CEHE’s schools were “a victim of this campaign.” 

Former CEHE employees who have spoken to me about the schools see CEHE’s new legal claims as simply more deceptions.

McCarty’s experience at CEHE

One former CEHE employee is Dorothy McCarty, a conscientious, thoughtful young person who joined the Independence University financial aid department in February 2019, working remotely from home. McCarty was soon promoted to the job of Senior Financial Planner, putting together financial aid packages for prospective Independence University students. At first they thought it seemed like a cool job — that’s the way Independence presented it — helping people get educations so they could improve their lives.

But McCarty’s views of the job and CEHE soon changed. McCarty contacted me in August 2020 after I had published an article about the schools. McCarty expressed to me concerns about the methods that CEHE used to recruit and enroll, and the impact on students, especially low-income people and people of color.

The Independence student population, McCarty said, was largely rural, Southern — Alabama, Mississippi, Texas. Some students were eighteen years old, right out of high school, while others were in their seventies. These prospects ended up getting called and messaged by CEHE recruiters — selling programs in medical assisting, graphic arts, cybersecurity, computer networking — because they clicked on a Facebook ad, or entered their contact information on a deceptive third-party lead generation website, or saw one of the many Independence ads on TV. 

Her team’s aim, said McCarty, was to get the student committed to enroll and accept the financial aid package in a single phone call, or two days of discussions max. Half the time a prospective student who agreed to enroll while speaking to an Independence admissions rep would try to back out while talking to the financial aid advisor. McCarty said, “We are trained to overcome objections” about the cost, or the time commitment, or the fact that the school was on probation with its accreditor.

If they couldn’t persuade the applicant, they were instructed to send that person back to the admissions department for more persuasion. Or financial aid and admissions staffers would tag team to call wavering prospects multiple times a day. If a prospect demanded, DO NOT CALL ME, the calls might stop.  “Anything else,” McCarty told me, “is fair game.” Even if a prospect had recently had an auto accident, or lost a child, McCarty’s manager still directed them to call back.

McCarty felt pressure from supervisors to get numbers. “I have to package 22 students a month or I get on warning,” McCarty said at the time. 

But enrolling at Independence wasn’t a good deal for students, McCarty concluded. 

Tuition was $74,700 for four-year degree. “There is a very strong chance that enrolling won’t help their lives. Instead it hurts them,” McCarty told me. “We use up their federal loans and then they have to sign up for an extra private loan from the school,” which could mean they would owe $25,000 on top of $40,000 in federal student loans. McCarty estimated that 99 percent of enrolling students took out these private “EduPlan” loans from CEHE. Supervisors pressed financial aid advisors to push students into these loans. Unlike the federal loans, where payment didn’t start until the student finished school, the first EduPlan payment was due in just 45 days.

“Students call me three months later to ask, when do I get my refund check?” McCarty said. “Clearly they don’t know what they are getting into.”

The quality of the instruction was also dubious. McCarty themself was enrolled at Independence, in a business administration course, because after a year an employee was eligible to get a degree at no cost. They said the classes weren’t challenging. Many seemed to be at a 5th or 6th grade level. Tests were multiple choice, and you could get an A if you just completed your homework or put together a simple spreadsheet. Normally you were interacting with a computer, not a person, and often when McCarty tried to reach out to an instructor, that person was “not helpful in any way.” 

Sometimes McCarty would look up a student they had helped enroll, to check their progress. Many had dropped out. 

McCarty and I spoke several times in 2020 and 2021, and we’ve spoken more this year. I wrote a number of articles about CEHE, but I never mentioned her name in any of them. (McCarty now works in the insurance industry.) 

CEHE probes McCarty

After Donald Trump and Betsy DeVos left Washington in January 2021, and the incoming Biden administration pledged to protect students from predatory schools, I connected McCarty, as well as more whistleblowers from CEHE schools and from other colleges, to Department of Education investigators.

McCarty met with a group of Department investigators on that April 27 Zoom call. 

CEHE apparently found out, or suspected, that McCarty had such a meeting. On May 6, 2021, barely a week after McCarty met with the Department investigators, and a few days after McCarty got the first text message threat, they received a voicemail from Charles P. Elliott, a Pennsylvania certified forensic accountant who advertises services including tax preparation, bookkeeping, and fraud prevention. Elliott’s LinkedIn page indicates that in the 1980’s he was an Economic Crime Investigator with the Philadelphia District Attorney’s Office.

Elliott’s message began “Good afternoon, Ms. McCarty. My name’s Charlie Elliott. I’m doing a compliance review for CEHE. I was hoping to have a call with you regarding your position with the school and other issues.  If you would like to call Gerber to verify I work for the school please do so.” McCarty didn’t know any “Gerber,” but Elliott was likely referring to CEHE’s then-general counsel Matthew Gerber.

McCarty says they eventually did return Elliott’s call, after CEHE’s director of financial aid told McCarty they needed to do so. McCarty says they spoke with Elliott for nearly two hours in the second week of May 2021. Elliott began, they recalled, by saying that everything they discussed would remain between the two of them, although there also was a third person on the call whom Elliott presented as a notetaker. 

Elliott then asked McCarty extensive questions about their job. “It was really a bunch of fluff until the end,” McCarty says. Then, finally, Elliott asked if McCarty had talked with the Department of Education. McCarty’s recollection is that they replied that they had participated in a protected activity. They were referencing the fact that whistleblowers who expose illegalities by their employers are protected by law from retaliation. When Elliott pressed for details, McCarty said they did not feel comfortable saying more. At that point, Elliott said he would have to investigate further and report back to CEHE. McCarty responded that this statement by Elliott contradicted his pledge to keep the conversation private. 

McCarty says they never again heard from Elliott, or from the company regarding possible contact with the Department of Education.

I don’t know who aggressively threatened Dorothy McCarty on two different occasions last year, but the circumstances and substance of the text messages suggest it was someone who was unhappy or felt threatened that McCarty spoke with outsiders about their concerns regarding practices at CEHE. 

McCarty says they told no one else that they had spoken with federal investigators besides their mother, their then-romantic partner (another former CEHE employee whose relationship with McCarty ended on good terms), and me. (McCarty told me about the May and October 2021 threats, and sent me screenshots, the same days they received them.) But it’s certainly possible that someone at CEHE learned that McCarty had met with the Department of Education by monitoring McCarty’s activities, perhaps her computer use. 

CEHE’s response

When I asked him yesterday about the threats to McCarty, Eric Juhlin, the long-time CEHE CEO, denied any knowledge of them — or of any investigation of them.

Juhlin told me via Twitter direct message that he “separated from CEHE” the first week of May 2021. Then, “around November 2021, I stated doing some work for them as an independent contractor.” I noted to Juhlin that the CEHE press release last month announcing the new lawsuit filed by the organization described him as CEHE’s “Acting CEO.” 

Juhlin messaged me:

David, I do not recognize the name Dorothy McCarty and I have no knowledge of any text messages this person may have received from anyone. You seem to allege that someone from CEHE sent her threatening texts. If so, perhaps you can tell me who sent her the alleged texts and then I could see if that person was even a CEHE employee.

I provided Juhlin with the screen shots of the threats, as well as the phone numbers from which they were sent.  He responded:

I can assure you that none of these message were from or approved by CEHE. I cannot determine from the phone numbers of the sender if this person or persons were ever employed by CEHE. 

Juhlin said that by October 2021

cehe had a small group of accounts payable and accounting people after they terminated almost 99% of employees in July/August 2021. There is no way these texts were in any way approved or authorized by CEHE. I know I never did and I’m 100% confident that Paul Gardner never did either.

Gardner had become CEHE’s interim CEO in May 2021, after Juhlin resigned.

Juhlin further told me:

It looks to me like a personal conflict or issue with another person who [McCarty] may or may not have worked with. Don’t know if that person was part of cehe or not. But it would not have been an action approved or initiated by CEHE leadership.

Juhlin acknowledged knowing “who Charles Elliot is and he did do some work for CEHEs legal counsel – but his only work was related to internal work on the False Claims Act lawsuit that has been in discovery for the past 8-9 years.” But Juhlin told me he did not know that Elliott had contacted McCarty. 

I called Charles Elliott’s phone number today, and he answered it. At first he said he had never worked for CEHE. When I questioned that response, he said he was hired to work on CEHE matters by the law firm Gombos Leyton. He declined to address my questions about Dorothy McCarty, saying any matters he worked on would be covered by attorney-client privilege, and he referred me to Steven Gombos, a member of that law firm, which is based in Fairfax, Virginia.  Elliott told me the law firm’s phone number.

Then he hung up.

I called the number Elliott gave me for Gombos’s law firm, but the automated system didn’t seem to work. So I looked up the direct line of Steven Gombos, who represents CEHE in numerous litigation matters, including the Colorado appeal, the False Claims Act case, the CFPB investigation, the lawsuit against accreditor ACCSC, and the new action seeking $500 million from the Department of Education. (Gombos Leyton represents other companies in the career college industry, including currently collapsing predatory for-profit ASA College. Gombos’s law partner Peter Leyton served for more than a decade on the board of the industry’s main lobbying group, now called CECU.)

Gombos picked up the phone. I introduced myself, and he said, “I know who you are.” I said I wanted to discuss CEHE and Charlie Elliott and Dorothy McCarty, who in 2021 received threatening text messages with pictures of her house and a dead dog. Gombos seemed to take offense. He said something to the effect that if I had a law degree from anyplace other than from the wrapper of a bubble gum card, I would know he couldn’t discuss a client matter. I said I graduated from Yale Law School (I rarely say that, but what the hell), and that lawyers are permitted to speak about matters when their clients authorize it. Gombos then said multiple times, “I feel bad for the woman,” surmised multiple times that McCarty must have been threatened by “some lunatic,” and complained multiple times about a “national crime wave” that he blamed on the current leadership of the country.

Then he hung up. 

Carl Barney and Matthew Gerber did not respond to requests for comment. 

Who is responsible?

I like and respect Dorothy McCarty. In fact, I’m kind of in awe of them. Dorothy is smart and funny and a big basketball fan. Dorothy also is principled and brave, and they spoke up because they thought the students recruited to Independence University deserved better with their time and money and effort than the cynical, deceptive CEHE operation. They didn’t want to see more people tricked into lives of endless debt with no career advancement to show for it.

Dorothy didn’t deserve to have a single moment where they thought a vengeful antagonist was after them, or at their door. 

At this point, as I said, I can’t tell you who texted those threats to McCarty, who was a witness in a federal investigation, in May and October of last year. I do know federal agents were investigating the matter, because they interviewed Dorothy.

But Juhlin told me he has never heard of McCarty. If that’s true, does it mean that federal agents never contacted CEHE? Or that Juhlin never found out about that contact? 

A U.S. Department of Education spokesperson told me this week that the Department had no comment on whether there was an ongoing investigation of the threats to McCarty.

And I do know the first text threat to McCarty came just as CEHE engaged its investigator Charles Elliott to contact McCarty on May 6, 2021, and, the next week, to ask her whether they talked to the Department of Education. There’s no evidence connecting Elliott to the threats, and I don’t mean to imply otherwise. The point is that Elliott’s questions to McCarty suggest that a person or persons inside CEHE were focused on McCarty as a possible whistleblower, someone who might be giving federal investigators information about the organization, and thus someone who represented a risk to the company’s future. But then Eric Juhlin, who was CEHE’s CEO until early May 2021 and says he returned to the company around November 2021, tells me he has never heard of McCarty.

Whether someone, at some level, in CEHE orchestrated the threats to Dorothy McCarty, or whether it was somebody outside the company, is something I still hope to find out.