Prosecutor to monitor for-profit college chain

AP Education WriterJuly 18, 2014 

— Former federal prosecutor Patrick Fitzgerald has agreed to serve as an independent monitor of a troubled for-profit education company serving 72,000 students that has agreed to sell or close its campuses, the Education Department said Friday.

Fitzgerald prosecuted high-profile cases against Lewis "Scooter" Libby, a top aide to Vice President Dick Cheney, and former Illinois Gov. Rod Blagojevich.

As part of an agreement with the Education Department, Corinthian Colleges, based in Santa Ana, California, has said it will close a dozen U.S. campuses in 11 states and place 85 up for sale. The company owns Everest College, Heald College and WyoTech schools. About a dozen others in Canada will also be sold.

The company also agreed that an independent monitor would examine its compliance, including making sure that plans are followed that allow students to complete their programs. Some students are eligible for full refunds, and the company has said it would work with the monitor to establish a reserve fund of at least $30 million to pay those funds.

The company, which receives about $1.4 billion annually in federal student aid, continues to face multiple state and federal investigations.

The department in June placed Corinthian on heightened financial monitoring with a 21-day waiting period to receive federal funds. The department said the company failed to provide adequate paperwork and failed to comply with requests to address concerns about company practices. The department said the concerns included allegations of falsifying job placement data used in marketing claims to prospective students, and allegations of altered grades and attendance.

Libby was convicted of perjury and obstruction of justice. He was sentenced to 30 months in prison, but President George W. Bush commuted the prison sentence. Blagojevich is serving a 14-year prison sentence for political corruption.

Fitzgerald in 2001 was appointed a U.S attorney in Illinois by Bush. He now works for the firm Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates.

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