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Stone Academy Owner Mark Scheinberg Pays $1 Million to Resolve Falsifying Student Loan Data Allegations
Mark Scheinberg, owner of Stone Academy, a for-profit school with campuses in East Hartford, Waterbury and West Haven, has paid over $1 million to resolve allegations of falsifying student loan data. According to the U.S. Attorney for the District of Connecticut, Vanessa Roberts Avery, Scheinberg and Stone Academy concealed a series of money order payments made by Scheinberg to prevent certain loans from being counted in Stone Academy’s student loan default rate.
The payments, made between February 2015 and March 2019, consisted of 154 small, direct payments to loan servicers on behalf of 102 students, with Scheinberg purchasing and filling out the money orders without the students’ knowledge or consent. Stone Academy then failed to disclose to the U.S. Department of Education its actual, higher student loan default rate reflecting the deemed default of numerous borrowers given Scheinberg’s concealed payments.
The settlement resolves allegations that Scheinberg and Stone Academy violated the federal False Claims Act by concealing the money order payments and failing to disclose Stone Academy’s actual student loan default rate to the U.S. Department of Education. In addition to making payment of $1,023,950, plus interest, under a civil settlement agreement, Scheinberg also entered into an administrative agreement with the U.S. Department of Education in which he agreed to cease involvement and participation in the operations, and divest direct ownership, of both Stone Academy and another for-profit school, Creative Workforce LLC, doing business as Paier College of Art.
“The cohort default rate is an important metric that students can use to research whether a school provides a valuable education because it can show whether the degree they would earn will help them find employment that allows them to stay current on their student loans,” said U.S. Attorney Avery. “Educational institutions – especially private, for-profit schools – that attempt to hide high student loan default rates from the Education Department and their students not only risk forfeiting their and their students’ eligibility to receive federal funds, but they risk federal enforcement by our office and our investigative agency partners.”
Terry Harris, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Eastern Regional Office, added, “Today’s settlement is a result of the work and effort of the Office of Inspector General and the U.S. Attorney’s office to protect and maintain the integrity of federal student aid programs. We will continue to work together to ensure that federal student aid programs operate free from waste, fraud, and abuse.”
In related news, Scheinberg agreed to cease involvement and participation in the operations, and divest direct ownership, of both Stone Academy and another for-profit school, Creative Workforce LLC, doing business as Paier College of Art, as part of the administrative agreement with the U.S. Department of Education.
The settlement is a result of the work and effort of the U.S. Attorney’s office and the U.S. Department of Education Office of Inspector General to protect and maintain the integrity of federal student aid programs.
Key Facts
- State: Connecticut
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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