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What Happened to the Money?

DETROIT (CN) - The online Global College of Natural Medicine and its sole owner charged thousands of dollars for college degrees, then shut down midterm and stiffed students for their tuition, a class action claims in Federal Court.

Lead plaintiff Anita Toler sued the college and Heather Johnstone, of Illinois, its "director, chief executive officer, and chief operating officer ... the 100 percent owner and only board member."

Toler claims that the "amount in controversy exceeds $5,000,000." She says she paid the defendants "more than $3,000 for a distance education program of study in the natural health field."

The defendants charged "more than $10,000" for an online Ph.D. according to the complaint.

It states: "GCNM [Global College of Natural Medicine was licensed to operate by the State of California as a postsecondary school beginning in approximately 2004.

"GCNM marketed and sold distance education programs in natural health fields of study to adults across the United States.

"GCNM marketed and sold distance education programs that offered adults opportunities to earn certificates and diplomas in subjects including Nutritional Consultant, Master Herbalist, Holistic Health Practitioner and other subjects, as well as Bachelor of Science, Master of Science, and Ph.D. programs."

Charges ranged from "$1,000 for its Nutritional Consultant and Master Herbalist programs to more than $2,000 for the holistic Health Practitioner Program to more than $10,000 for its combined Bachelor, Master and Ph.D. program."

The complaint adds: "Students enrolling at GCNM, including plaintiff and members of the class, were required to pay tuition prior to commencing their distance education programs.

"Plaintiff and other members of the class were required to submit either the entirety of their tuition in advance or a substantial amount prior to starting, with the balance due soon thereafter.

"Upon information and belief, a class of thousands of adults, including plaintiff, collectively entrusted GCNM defendants with millions of dollars in advance tuition for distance education programs that the students had not yet completed at the time of the school's abrupt closure in November 2012.

"On information and belief, GCNM collected more than $5 million in tuition from plaintiff and members of the class. Upon information and belief, a substantial amount of the millions of dollars had not yet been earned at time of GCNM's closure."

Toler says she "entrusted GCNM defendants with a total of approximately $3,120 in connection with her enrollment in a self-paced bachelor of science program in holistic health."

"Plaintiff had submitted her entire tuition amount at the time of the discontinuation of GCNM's distance education programs in November 2012.

"Plaintiff was still pursuing her bachelor of science program in holistic health at the time of the discontinuation of GCNM's distance education programs in November 2012.

"Following GCNM's sudden closure, Plaintiff demanded a refund, but GCNM did not provide one."

Toler claims that Johnstone "knew or should have known that for years prior to GCNM's closing that GCNM was experiencing significant financial and regulatory difficulty."

But Johnstone "took no steps to protect or recover the millions of dollars in tuition entrusted by students that had been transferred to others even though the tuition had not been earned," the complaint states.

"Prior to the sudden termination of GCNM's programs in November 2012, Heather Johnstone and GCNM gave no indication to students or to the State of California that GCNM might be closing.

"To the contrary, Heather Johnstone and GCNM continued to enroll new students for GCNM's distance education programs shortly before the closure of GCNM.

"Since the closing, Heather Johnstone and GCNM have failed to return millions of dollars entrusted by Plaintiff and members of the Class for prepaid distance education programs that it is now impossible to complete and that were not earned."

Toler seeks class damages for breach of fiduciary duty, negligence, bailment, fraudulent concealment, unjust enrichment and breach of contract.

She is represented by Thomas Howlett with the Googasian Firm, of Bloomfield Hills, Mich.

Johnstone's entry on the Web page describes her as an advanced practiced nurse with a "doctorate in metaphysics" and "a specialization in pranic healing."

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