WOODSTOCK, Ill. (CN) - A company claims it paid millions of dollars to buy the Environmental Technical Institute, based on bogus job-placement records that the school cooked up to try to earn and maintain accreditation. Jakma Investments demands $12 million from ETI, claiming its former owners and school officials instructed the staff to falsify 3 years of job placement records.
In its complaint in McHenry County Court, Jakma says it bought ETI's Itasca main campus and its Blue Island campus in August 2008 based on false promises that the school was certified by the U.S. Department of Education, and had been accredited by the "Accrediting Commission of Career Schools and Colleges" (ACCSC).
Jakma says the ACCSC requires that career institutes maintain a job placement rate for graduates of at least 70 percent, and that accreditation allows schools to participate in "Higher Education Act" programs and disburse financial aid.
Jakma says that ETI manipulated statistics in the annual reports it submitted to ACCSC and the Illinois State Board of Education (ISBE).
Jakma claims that ETI's former owners, Lynn Tortorello and her late husband Anthony Tortorello, through admissions director Wendy Czyz, instructed staff to push soon-to-be graduates who still owed fees or had not finished their resumes - among other shortcomings - to decline placement assistance.
"Job placement employees were directed to instruct, coerce, and/or pressure students not meeting certain requirements ... to waive, or decline placement assistance," the complaint states. "Upon receipt of such a waiver, defendants stopped assisting students and excluded them from the placement rate calculation".
Since ISBE's calculations were based on the "total number of graduates receiving a bona fide job offer as a result of the school's placement assistance divided by total number of graduates requesting placement assistance," ETI was able to "artificially decrease" the number of students who sought assistance, Jakma says.
It adds that ETI staff encouraged graduates to claim they were doing "side work" in their field, but "unaffiliated with an HVAC company ... whether or not such a statement was true."
In 2005, ETI claimed to have a job placement rate of 85 percent for its daytime program, though the true placement rate was 55 percent, Jakma says.
"Between 2005 through 2008, [ETI] failed to satisfy the 70 percent placement rate required by ACCSC but filed false, inaccurate, and misleading statistical reports to ACCSC," Jakma claims. It says that in early 2009, it reported this to the ACCSC after it conducted an investigation.
Jakma demands at least $12 million from ETI, the Tortorellos and Czyz, and from ETI's director of operations Camille Tortorello Trumbull. It alleges breach of contract, fraud, unjust enrichment and civil conspiracy.
Its lead counsel is Stuart Krauskopf.
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