Crime in the Suites: An Analyis of Current Issues in White Collar Defense
Jun 18

FBI Raid Targets For-Profit School in Florida: Was This Necessary?

When you hear of FBI agents descending upon a place, you might think of a hostage situation, a drug raid, or the penetration of a terrorist cell. But you probably wouldn’t assume that those armed agents were working with the U.S. Department of Education on a raid on a Florida for-profit college.

FBI agents raided campuses of FastTrain College in May 2012 in order to obtain data (documents and a computer or two) in furtherance of a joint investigation of the FBI and DOE of allegedly deceptive practices. One might wonder why the drama was necessary: Couldn’t the government just subpoena the materials or go in with a little less gusto? Yes, but the drama may have been a part of the plan.

While on campus, the agents questioned students about their Pell grants, used for tuition and expenses. Not surprisingly, all this activity caused a good bit of chaos and stirred up concern among students. One student was quoted as saying he was glad he was on campus at the time of the raid, “because they could’ve took money from me, a lot of money from me, and I’d have been screwed.” Another student relayed concerns over whether FastTrain was going to continue to operate, and what would happen to his credits. The students’ statements demonstrate a real concern over the credibility and viability of the institution – a concern incited by the FBI’s dramatic entry.

The drama also had major impact online, where several reports seem to have already decided the guilt of the college, inaccurately stating that the investigation found “deceptive and otherwise questionable sales and marketing practices.” This inaccurate quote, which was picked up and disseminated by the Huffington Post, goes to show how careless journalism can set the tone of a story. Here’s what appears to have happened:

• One report noted that “[t]here was a major undercover investigation by the General Accounting Office in 2010 of for-profit trade schools, which receive billions in federal loans and grants. The investigation uncovered ‘deceptive and otherwise questionable sales and marketing practices’ according to a government inquiry.”

• A later report peeled off the second sentence, stating, “Our news partner Channel 4 reports the investigation uncovered ‘deceptive and otherwise questionable sales and marketing practices,’ according to a government inquiry.”

• That quote itself was then picked up by Huffington Post contributor David Halperin, who stated “One report says the investigation found ‘deceptive and otherwise questionable sales and marketing practices.’”

These latter two stories missed the point that the identified deceptive practices were a part of the earlier 2010 GAO investigation and had nothing to do with the still-pending investigation of FastTrain. It appears that some writers are more than eager to jump to conclusions about the alleged greed of for-profit educators.

The DOE and the FBI have raided for-profit schools several times over the past several years – including at ITT and Corinthian College campuses. One source says that years into the ITT investigation, it finally concluded with no finding of wrongdoing. (Tell that to the students who fled from the school’s programs after the FBI raid.)

So why do the DOE and FBI keep up these shows of force at for-profit college campuses? Some of us skeptics may posit that they already have figured out for themselves that these institutions are bad, so they are making life difficult for the schools in order to give the industry a bad name in students’ eyes.

The FBI and DOE should follow the normal steps of investigation. Playing out drama and rigging public opinion before facts are gathered seems as incendiary as crying “fire” in a crowded theater or inspiring a bank run.

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  • Anonymous says:

    As someone that was present at the time of the raid the entire “show” was designed to put the small college out of business. Students and staff were subjected to pat-down searches, police dogs conducting person to person searches and agents with guns in the fire position. In one campus students were not allowed to disembark from the school bus for over two hours. Employees caught inside the premises were not allowed to contact lawyers or family members for over two hours. Some employees were threatened that they would be arrested in front on their children if they did not cooperate with the investigation.

    In two campuses the feds had call the media and the media was sitting in the parking lot waiting for the agents to arrive. In one campus the feds did not product a copy of the search warrant until 5:00 PM.

    To make matters worse agents showed up at student homes in the late hours and interrogated. Over 600 students were subjected to this trauma. The feds could have easily executed the warrants on a Friday when students were not present.

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About Ifrah Law

Crime in the Suites is authored by the Ifrah Law Firm, a Washington DC-based law firm specializing in the defense of government investigations and litigation. Our client base spans many regulated industries, particularly e-business, e-commerce, government contracts, gaming and healthcare.

Ifrah Law focuses on federal criminal defense, government contract defense and procurement, health care, and financial services litigation and fraud defense. Further, the firm's E-Commerce attorneys and internet marketing attorneys are leaders in internet advertising, data privacy, online fraud and abuse law, iGaming law.

The commentary and cases included in this blog are contributed by founding partner Jeff Ifrah, partners Michelle Cohen and George Calhoun, counsels Jeff Hamlin and Drew Barnholtz, and associates Rachel Hirsch, Nicole Kardell, Steven Eichorn, David Yellin, and Jessica Feil. These posts are edited by Jeff Ifrah. We look forward to hearing your thoughts and comments!

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