Corinthian Colleges — the company that operates for-profit college chains like Everest, WyoTech, and Heald — is already under investigation by various state and federal regulators, but the company has disclosed to its investors that it may also be the subject of a criminal probe by federal prosecutors.
In yesterday’s filing with the Securities and Exchange Commission, CCI runs down the long list of ongoing investigations into its questionable business practices. These include subpoenas and requests for information from more than a dozen states’ attorneys general, and both the SEC and the Consumer Financial Protection Bureau.
That list concludes with a new item indicating that CCI now faces the possibility of a criminal investigation.
“On August 8, 2014, the Company received a grand jury subpoena for documents from the United States Attorney’s Office in the Central District of California,” reads the filing.
The subpoena is requesting a wide range of information from the company, which recently made a deal with the U.S. Dept. of Education to close down or sell off most of its campuses in the coming months.
Among the information covered by the subpoena is data on job placement and graduation rates. The company has been accused by the California Attorney General’s office of misrepresenting the success of its students to both applicants and investors.
Former CCI staffers recently told Consumerist that the school deceived students about the job-placement help they would receive.
The subpoena also requests information about whether or not credits earned at CCI schools could be transferred to other colleges. A number of former students have complained they were not told their credits would not transfer — or would only partially transfer — if they left a CCI school for another college.
This is of particular concern as CCI shuts down some of its campuses. Those students may need to start over again if they can’t find a new school that will accept their existing credits.
Additionally, the prosecutor is seeking out information on CCI’s financial aid practices — including data on student loans and defaults — and its military connections. CCI and other for-profit schools have a history of marketing heavily to servicemembers.