July 13, 2023

Connecticut AG Sues For-Profit Stone Academy For Deceiving Nursing Students

Connecticut AG Sues For-Profit Stone Academy For Deceiving Nursing Students

Connecticut attorney general William Tong today sued Stone Academy, one of the many for-profit colleges that have shut down in the past year, with a complaint alleging the school promised nursing and other health care students a quality education leading to a good career, even as it cut educational spending and denied many attendees the clinical training they needed to graduate. Many students ended up tens of thousands in debt, while the school’s owners earned big profits by expanding enrollment.

“Stone’s day of reckoning is here,” Tong announced in a press release. At a press conference today, he said, “I’ve seen a lot of people hurt and a lot of people taken advantage of.”

Tong’s lawsuit names as defendants West Haven, CT-based Stone Academy, owner Joseph Bierbaum, and another Connecticut for-profit school Bierbaum owns, Paier College of Art. The AG alleges numerous violations of the Connecticut Unfair Trade Practices Act.

Stone Academy closed its three campuses in February, leaving more than 800 students locked out and their futures unclear. After Stone informed the Connecticut Office of Higher Education on February 6 that it was closing, the state responded with a letter asserting that the school had low pass rates on the nursing license exam, used unqualified instructors, and offered “invalid” clinical opportunities.

Tong is seeking civil penalties of up to $5000 per violation of the Connecticut Unfair Trade Practices Act, which he says would likely total “many millions of dollars, in addition to the disgorgement of all revenues, profits and gains achieved through such acts and practices.” The complaint also seeks restitution for Stone students.

Tong has asked a state court to attach millions of dollars of assets belonging to Stone Academy and Birbaum, including a “mansion” Bierbaum owns in Rocky Hill, CT.  “This,” Tong says, “would prevent the defendants from offloading or shifting resources to evade accountability.”

Tong charges that Bierbaum took tuition money from Stone students and spent it on promoting his other school, Paier College of Art — directing Stone staff to help run Paier and even to work, in one instance, for Bierbaum’s home improvement contracting business.

The press release details the AG’s charges of abuses:

Stone offered day and evening practical nursing programs at locations in East Hartford, Waterbury and West Haven. Stone aggressively advertised—targeting women and prominently featuring women of color– on billboards, via social media, and on radio, television and internet advertisements, promising students “hands on instruction from a dedicated staff.” Stone claimed their practical nursing program would “prepare and assist students in acquiring the basic knowledge and skills necessary to be hired into an entry-level position as a Licensed Practical Nurse” in less than two years. The school promised training from “industry leading professionals,” including an 860-hour clinical rotation and a 40-hour on-campus lab component giving students the “hands-on practical experience required to work alongside and assist doctors and registered nurses, providing routine care.”

Stone’s program cost well over $30,000, plus additional fees and expenses. The majority of Stone students took loans to pay for the program, and dedicated time away from their careers and families to further their education.

Stone utterly failed to provide the education and training it promised. Stone’s multiple, blatant failures and regulatory violations created a situation that caused many of its graduates to be ineligible to sit for the NCLEX licensing exam and obtain licensure in the State of Connecticut, thus violating one of Stone’s most important promises.

Stone faculty were not “industry leading professionals.” Instead, Stone knowingly hired entry-level and associate degree nurse instructors who were not permitted to teach practical nursing students under Connecticut regulations.

Stone did not have a “dedicated staff” for its students. In fact, multiple individuals on Stone’s payroll worked as well for Bierbaum’s other for-profit entities, including Paier College and his own home improvement company.

Stone provided only a fraction of the 860 hours of “hands-on” clinical experience that it had promised. Stone students could not graduate in the time promised due to a backlog of over 1,000 students waiting for clinical hours by late 2020. Faced with this severe backlog of students in need of clinical hours, rather than stop or slow enrollment, Stone utterly disregarded state regulations. Stone unilaterally decreased the number of clinical hours it promised to students by approximately 15 percent. In violation of state regulations, Stone offered invalid “on-campus” clinical experiences, and Stone exceeded maximum 10:1 faculty-student ratios. At Bierbaum’s direction, students performed COVID-19 temperature screenings for Stone and Paier College, even though neither school is a healthcare facility and thus qualified to offer valid clinical training. At Bierbaum’s direction, Stone eliminated a requirement that attendance be taken at clinical sites. In depositions, witness interviews and internal emails Stone administrators reported many instances where students left or were dismissed early from clinicals with no academic consequences.

While Stone students suffered, Stone’s owners, Bierbaum and Mark Scheinberg profited greatly, receiving many millions of dollars, including from separate businesses they created to service Stone Academy. Bierbaum’s other business ventures also benefited. Stone Academy administrators were routinely assigned to work for Paier College. Stone’s Admissions Director simultaneously worked for Paier, and also spent over one and a half years working for Bierbaum’s home improvement company while being paid by Stone. Bierbaum’s Chief of Staff at Paier College was exclusively on Stone’s payroll.

In multiple instances, Stone Academy paid expenses on behalf of Paier, including marketing costs and charitable contributions. Through Bierbaum, between 2019 and through at least 2021, Stone subsidized nearly $1 million of Paier College’s expenses each year using Stone tuition money. These subsidies occurred while Stone students lacked books, lab supplies, adequate classroom space, and even at some times adequate heat and running water.

Tong further charged today that Stone’s response to his investigation “has been plagued with calculated maneuvers to withhold damaging texts and emails and aggressive public relations campaigns designed to obfuscate and mislead the public, its own students, state officials and lawmakers. ”

Perry Rowthorn, a former Connecticut chief deputy attorney general now representing Stone Academy, said in a statement: “It is sadly not surprising that the State’s efforts are devoted to preparing a baseless lawsuit, instead of helping the many vulnerable students harmed by the Office of Higher Education (OHE) forcing the precipitous closure of Stone Academy.”

But Tong called the claim that the state shut down Stone “utter nonsense, another lie.” Stone, he said, “shut down when they felt the heat.”

In May 2022, the U.S. Justice Department settled a whistleblower lawsuit with Stone Academy and owner Mark Scheinberg, with those defendants agreeing to pay just over $1 million to resolve allegations that they concealed payments by Scheinberg to prevent certain loans from being counted in Stone Academy’s student loan default rate, and for failing to disclose Stone Academy’s actual, higher default rate to the U.S. Department of Education. Scheinberg at that time agreed to divest ownership in Stone and Paier.

UPDATE 07-13-23 4:40 pm:

Statement from Connecticut Senate Republican Leader Kevin Kelly, the Ranking Senator on the legislature’s Higher Education and Employment Advancement Committee:

“I applaud the Attorney General for going after the bad actor and pursuing justice in this unfortunate situation. Stone Academy did not fulfill its promise to its students, and for that there must be consequences. In the legislature this year, we worked in bipartisan fashion to pass legislation to provide direct relief to former Stone Academy students. We have a nursing shortage, and it is essential that we as elected officials work across multiple branches of government to help these students get their careers back on track and make them whole.”