“We expected it to go on a long time,” said Al Gilbert, the former solicitor general who led a team of 11 lawyers and paralegals in the case.
It was one of the few fraud cases against a for-profit college chain to go to trial. Following an investigation by the AG’s office, the state sued, saying that MSB and Globe falsely marketed a criminal justice program to 1,300 students as a way to become a Minnesota police or probation officer, when in fact the schools’ program did not qualify graduates for those professions.
During a 17-day trial, the court found in the state’s favor, saying that it showed the pervasiveness of the schools’ false and deceptive practices.
“The AG met with complainants and developed a case,” said Gilbert. “We thought the students were not treated right and were entitled to substantial relief.”
During litigation it also came to light that the schools made 18% interest loans to students when they ran out of financial aid. The state amended its lawsuit to include violations of usury and lender-licensing laws. The loans were held to be illegal and $3.5 million in refunds of interest payments were ordered. The court also said that the state could seek refunds for payments toward principal, along with prejudgment interest and penalties.
It was a very important case with a lot of moving parts,” said Gilbert. “We had a great team of lawyers and paralegals. I was confident we could get the job done.”
Read more about Minnesota Lawyer’s superb class of Attorneys of the Year for 2019 here.
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