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State Claims Corinthian Colleges Prey on Poor

SAN FRANCISCO (CN) - Corinthian Colleges lie about their job placement rates and use unofficial military seals in predatory ads to reel in society's most vulnerable people, California's attorney general claims in a blistering lawsuit.

California sued Corinthian Colleges and nine of its profit-seeking affiliates in Superior Court. Attorney General Kamala Harris wants the chain schools enjoined from making untrue or misleading statements to low-income students.

The Courthouse News database shows more than 200 lawsuits against Corinthian Colleges, many of them class actions, accusing the profit-seeking chain of a wide range of misrepresentations.

According to California's lawsuit, Corinthian ads target single parents close to the federal poverty level of $19,530 for a three-person household. The college and its subsidiaries, however, often charge more than $40,000 for tuition, fees and books, according to the complaint.

Corinthian "targets this demographic, which it describes in internal company documents as composed of 'isolated,' 'impatient,' individuals with 'low self-esteem,' who have 'few people in their lives who care about them' and who are 'stuck' and 'unable to see and plan well for future,' through aggressive and persistent internet and telemarketing campaigns and through television ads on daytime shows like Jerry Springer and Maury Povich,'" the 33-page complaint states.

The attorney general claims that Corinthian exaggerates job placement rates to students and investors, lies about the programs it offers to trick prospective students, and includes illegal clauses in enrollment agreements, purporting to shield the schools from student claims.

Claims that job placement rates were as high as 100 percent for some programs were found to be false, the state says, with no evidence that a single student secured employment in a time frame specified in Corinthian's disclosures.

Corinthian uses the official seals of the Army, Navy, Air Force, Marine Corps and Coast Guard in mailers and on its website, though the U.S. armed forces have no relationship with the schools and are not affiliated with them, according to the attorney general.

"The seals and related content were used in a manner that reasonably could be interpreted or construed as implying federal government connection, approval, or endorsement," the complaint states.

California calls Corinthian's practices "all the more egregious" because of California's 6-year-old injunction against the for-profit's Everest campuses.

The state seeks civil penalties, disgorgement of profits, restitution, and damages for untrue or misleading representations, unfair competition, securities fraud, and violation of injunction.

Named as defendants are Heald College, Corinthian Colleges, Corinthian Schools, Sequoia Education, Career Choices, MJB Acquisition, Titan Schools, Rhodes Colleges, Florida Metropolitan University, and Everest College Phoenix.

Harris said in a statement that Corinthian's "unconscionable" predatory ads rake in profits, "mislead investors" and "targeted some of our state's most particularly vulnerable people - including lo- income, single mothers and veterans returning from combat."

"My office will continue our investigation into the for-profit college industry and will hold accountable those responsible for these illegal, exploitative practices," Harris said.

Based in Santa Ana, Corinthian runs 24 Everest, Heald and WyoTech campuses in California, 111 North American campuses and three online programs. The state says 81,000 students are enrolled at Corinthian colleges, 27,000 of them in California.

Corinthian Colleges spokesman Kent Jenkins said the company was "disappointed" the attorney general had sued, and said the school had been "cooperating extensively with the attorney general's office for nine months, as we have previously disclosed."

Jenkins said Corinthian is "committed to regulatory compliance," and that the school has "robust processes in place to correctly record and disclose the job placement information we receive from our graduates and their employers."

"We will vigorously defend against this complaint," Jenkins wrote in an email.

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