Charlotte School of Law bilked $285 million from taxpayers, former faculty member says

Charlotte School of Law bilked $285 million from taxpayers, former faculty member says
Former Charlotte School of Law faculty member has sued her former school for the federal government, alleging school leaders fraudulently collected some $285 million in federal money over a five-year period. (Courtesy of Coleman Watson)
Former Charlotte School of Law faculty member has sued her former school for the federal government, alleging school leaders fraudulently collected some $285 million in federal money over a five-year period. (Courtesy of Coleman Watson)
A lawsuit filed by a former faculty member of Charlotte School of Law accuses school president Chidi Ogene of conspiring to defraud the government out of student-loan money. School leaders say the allegations are untrue. (John D. Simmons)
A lawsuit filed by a former faculty member of Charlotte School of Law accuses school president Chidi Ogene of conspiring to defraud the government out of student-loan money. School leaders say the allegations are untrue. (John D. Simmons)

CHARLOTTE, NC (Michael Gordon/The Charlotte Observer) - A lawsuit filed by a former professor of Charlotte School of Law accuses the failed school and its corporate owner of defrauding taxpayers out of $285 million by admitting hundreds of unqualified students, then manipulating records to keep them enrolled so the school could collect their government-backed tuition.

Barbara Bernier says the for-profit school, which closed last week, conspired with its owner, the InfiLaw System, to inflate enrollment and maximize profits. She says Charlotte Law lowered admissions and retention standards while misrepresenting both the state bar exam scores of their graduates and their success in finding jobs, according to a 2016 complaint that became public for the first time this month.

"The goal of the school has never been focused on education," said Coleman Watson, Bernier's Orlando, Fla.-based attorney. "The shareholder tended to be more important than the student body, and that's why she came forward."

Contacted by the Observer, Charlotte Law spokeswoman Victoria Taylor issued a statement that the school "will defend itself vigorously against the allegations in the complaint. Beyond that, we do not intend to comment on pending litigation."

The school officially closed on Thursday. "We regret to announce that after months of extraordinary effort, Charlotte School of Law no longer has a path forward," interim Dean Paul Meggett said in a Thursday statement to faculty, alumni and students. "We are heartbroken that we did not achieve the desired outcome ... We are continuing to work diligently to help our remaining students find opportunities to complete their legal educations."

Bernier's whistle-blower lawsuit, which had been sealed at government request in the Florida federal courts, offers new details of what she describes as a culture that favored cash flow over academics, fueling Charlotte Law's startling growth and its equally rapid collapse. And, she singles out school president Chidi Ogene and former dean Jay Conison with conspiring to defraud the government.

Her filing describes a school that pledged to "establish a benchmark of inclusive excellence" and produce "practice-ready" graduates. Instead, she says, 90 percent of students at InfiLaw's three for-profit campuses have amassed a quarter of a million dollars in loan debt, with few landing the high-paying jobs necessary to repay the money.

Bernier filed her complaint in June 2016 under the False Claim Act in behalf of the federal government. As part of the lawsuit, Bernier asks that she receive a percentage of any damages awarded.

In an Aug. 14 filing, the U.S. Attorney's Office in Orlando said its investigation into Bernier's allegations continue but that it would not be intervening in her case at this time.

Hundreds of current and former students already have sued Charlotte Law for fraud and other grounds. Bernier is the first of their former teachers to join them.

In 2015, while on the law faculty at Florida A&M University, she sued the school charging that she was paid less and offered fewer opportunities because she was a woman.

Watson described Bernier as "someone who is not only keenly aware of her legal rights but also can recognize a potential violation of the law."

N.C. Attorney General Josh Stein, whose office has launched its own consumer-fraud investigation into Charlotte Law, says his staff will be following Bernier's case to learn more about how the school treated its students.

"We want to make sure that the promises the school made were truthful," Stein said. "Too many folks haven't gotten what they expected to get from their legal educations, and it has cost them hundreds of thousands of dollars."

'Harm to its reputation'

Charlotte Law had 1,600 students as recently as 2013, making it by far the largest law school in the state. At its closing, and after a year in which it was put on probation by the American Bar Assocation and expelled from the federal student-loan program, enrollment had fallen to under 100.

Earlier this year, Ogene, a former general counsel for InfiLaw, said the government's surprise decision to withhold student-loan money had come after the school had raised admissions standards and was addressing criticism of its curriculum.

Bernier taught constitutional law at the school as a tenured faculty member from 2014-16. She resigned shortly after suing the school.

Much of her complaint focuses on the steps school leaders took in 2008 to increase and maintain the flow of students despite a recession that slashed both legal jobs and law school applications. Admissions office employees were given quotas of students they had to accept to keep their jobs, the suit says.

Over a six-year period beginning in 2010, Bernier says 1,355 substandard students were enrolled, which she says led to $285 million in improper government payments to the school. Watson said the estimate is based on public documents and statistics between 2010 and 2015.

As financial pressures grew, the churn of students at Charlotte Law became more intense. Stein told the Observer that the school ranked dead last among the country's 208 law schools in student retention.

Infilaw, which branded itself as "serving the underserved," repeatedly targeted graduates of Historically Black Colleges and Universities as a revenue stream, Bernier says. In the school years of 2013 and 2014, Charlotte Law "indiscriminately admitted" an average of 45 students from Livingstone College in Salisbury. Few made it through a second semester, the lawsuit says.

To bolster the school's sagging bar exam passing rate, school leaders identified students at risk of failing and paid them $5,000 to wait a year before taking the test. That meant their results would not be added to the first-time takers of the test, which is used to report a school's overall mark.

At several points, school leaders reduced the grade point averages needed by students to remain in good academic standing to keep dozens of unqualified students in school who should have been disqualified, the suit says.

According to the complaint, Conison told faculty at the time that InfiLaw "could not tolerate the financial loss or the harm to its reputation."