San Francisco Superior Court Judge Curtis Karnow said Corinthian Colleges Inc. of Santa Ana, which owned Heald College and the heavily advertised Wyotech technical schools, had deliberately misled students and improperly tried to recoup student debt.
“For years, Corinthian profited off the backs of poor people — now they have to pay,” California Attorney Gen. Kamala Harris said in a written statement after the default judgment was entered, according to the Los Angeles Times newspaper.
“This judgment sends a clear message: there is a cost to this kind of predatory conduct,” she said.
The decision was a default judgment because attorneys for Corinthian did not appear, the newspaper said.
But in a 21-page ruling, Karnow agreed with Harris’ contentions that Corinthian had duped students and investors with untrue statements about graduation and job placement rates. advertised programs it never offered and improperly used U.S. military seals in its advertising.
Karnow also said Corinthian had misrepresented the likelihood of transferring credits to the California state college system, the newspaper said.
The judge ordered Corinthian to pay $820 million to students and pay civil penalties exceeding $300 million.
Harris had sued Corinthian and its subsidiaries in 2013, accusing them of a “predatory scheme” involving the targeting of low-income students by overstating job placement rates.
Corinthian was then sued by the U.S. Consumer Financial Protection Bureau and fined by the Department of Education for overstating placement rates.
Corinthian reported debts of $143 million and assets of $19.2 million when it filed for bankruptcy protection last year.
Five years earlier, the company had reported assets of nearly $1.4 billion, the newspaper said.
Attorneys for the colleges sought to withdraw from the case earlier this month, claiming that they could find no Corinthian representative to confer with.
Wednesday’s judgment applies to all students at Corinthian and its affiliates, Heald, WyoTech, Everest College, Everest online and Everest College Phoenix, the newspaper said.
There were 12 Heald campuses in California, Hawaii and Oregon and 13 Everest and WyoTech colleges in California, in addition to Everest Phoenix and the Everest Institute in Rochester, N.Y.
