Globe University and the Minnesota School of Business engaged in systematic fraud and deception in marketing to students, making claims that credits transferred to other schools and in overstating the success rates of its graduates, the Minnesota Attorney General's Office argued in court Monday.
Suit alleges false claims, high-pressure tactics by for-profit schools
State's attorney alleges false promises of jobs, overstated success rates.
April 5, 2016 at 2:53AM
But the schools' attorney painted a different picture in opening statements of a civil trial in Hennepin County District Court.
The schools' success claims are no different from those of other schools, and its sales and marketing personnel were given strict instructions in manuals and in training on how to portray the schools to potential students, many of whom were poor, working class, or single parents — in other words, students for whom traditional educational institutions already had failed, the attorney said.
The trial, which is expected to last four weeks, could lay bare many of the inner workings of the for-profit education business, which has come under fire nationally over high-pressure marketing and inflated graduation and job placement rates.
It could also get personal. The schools' longtime owners, Terry and Kaye Myhre, and several other family members associated with the schools sat in the courtroom Monday morning and are expected to testify.
The trial is likely to feature former sales employees, known as admissions counselors, testifying about how they were pressured to sign students, who were known as "leads," regardless of whether the students were qualified to enroll.
The schools are expected to counter that the former employees were disgruntled and that any misunderstanding of expectations would have been more likely caused by a few mistakes from individual employees or potential students who were confused.
"Human error, not fraud, is the source of much of the misunderstanding," Joseph Anthony, an attorney for the schools, said in an opening statement. "The complaints are statistically insignificant."
Minnesota Attorney General Lori Swanson filed suit against the schools in 2014 alleging they used high-pressure sales tactics to recruit students into programs that did not deliver on the promise of jobs. The suit claimed many students enrolled in the schools' criminal justice program only to discover later that their degree failed to qualify them to become police officers in Minnesota.
The suit seeks to stop the schools from using deceptive marketing techniques and deceptive graduation and job placement rates. It also seeks civil penalties against the schools and a claims process in which students can seek compensation.
Offering 30 degrees, the schools have 19 campuses across Minnesota, Wisconsin and the Dakotas with 3,100 students and 1,000 employees.
In his opening statement Monday, Alan Gilbert, Minnesota solicitor general and the lead attorney for the state in the case, colored Globe and the Minnesota School of Business as more like the high-pressure sales operation in the movie "Glengarry Glen Ross" than an institution of higher learning. Training manuals will be introduced showing how sales personnel are taught to recognize "points of pain" in a prospective student's life and to exploit them, he said.
"You must be prepared to meet a 'no' and not be stopped by it," Gilbert said.
Anthony, the attorney for the schools, said promotions for the University of Minnesota and other institutions promise career opportunities after graduation.
"Selling an education is not illegal, it's not improper. Everybody does it," Anthony said.
One of the first to testify was a former admissions representative for the Minnesota School of Business' Blaine campus, who recounted quotas of 300 calls a week and the pressure to bring in new students.
Ashlie LeGrande said she once recommended against enrolling a potential student who had just been released from prison as a convicted pedophile. But, she testified, she was told to enroll him anyway.
She was asked what would happen if a salesperson didn't meet the goals.
"You would be let go," she testified, over the objection of the schools' attorney.
The state says it has at least seven former employees who could testify as well as several dozen former students.
The bench trial is being argued before Judge James Moore.
Mark Brunswick • 612-673-4434
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