State slams Dade Medical College, says it closed illegally

After a three-month wait, Florida’s for-profit college oversight agency has decided to go after Dade Medical College owner Ernesto Perez for the disruptive way he shut down his school.

In a unanimous vote Thursday, the state’s Commission for Independent Education asked its legal staff to refer Perez to law enforcement for an improper school closure, which is a second-degree misdemeanor.

“Student records weren’t provided. There was no closure plan provided,” said the CIE’s attorney, Judy Bone.

In addition to sending Perez’s name to prosecutors, the CIE board also asked Bone to pursue $20,000 in fines against Dade Medical and its smaller affiliate school, the University of Southernmost Florida, which also shut down at the same time. Additionally, the CIE voted to prohibit Dade Medical and USMF “owners/directors from ever operating again” in Florida.

Dade Medical’s Oct. 30 closure affected eight campuses around the state, with a total of about 2,000 students and 400 employees.

“They decided to close down on Oct 30, at about noon,” CIE staffer Charles Deal told the agency’s board members Thursday. “They didn’t tell the students until 4:15 that afternoon, and they didn’t tell us until 5:15.”

State law says it is a crime for “an owner, director or administrator who fails to notify the commission at least 30 days prior to the institution’s closure, or who fails to organize the orderly closure of the institution and the ‘trainout’ of the students.”

Perez did not answer a call to his cell phone late Thursday, nor respond to a text message seeking comment.

Miami-Dade prosecutors, who in November charged Perez with illegally bundling more than $159,000 in campaign contributions, have been communicating with the CIE about pursuing the school closure misdemeanor charge. The state agency’s Thursday vote, and its official finding that the closure was improper, frees local prosecutors to take over from here.

Perez has already pleaded guilty to those illegal campaign contributions, and is currently on house arrest.

The CIE’s Thursday vote was welcomed by Miami state Rep. José Javier Rodríguez, who has criticized the agency for not responding aggressively enough to the crisis caused by Dade Medical’s collapse. It was Rodríguez — and not the CIE — who held a Miami town hall in November to counsel former Dade Medical College students about their options, including the option of federal student loan forgiveness under a “closed school” discharge.

Earlier this week, Rodríguez blasted the CIE, in a letter to its executive director, saying it dragged its feet on sending Dade Medical’s improper closure to prosecutors. On Thursday, the state lawmaker said he was “gratified” that the state had acted. Rodríguez is one of several lawmakers who have filed bills this legislative session to crack down on abuses in the for-profit college industry.

“It’s clear that the changes we need in Florida aren’t just about changing law, which hopefully we’re doing, but about changing a look-the-other-way political climate for for-profit colleges,” said Rodríguez, a Democrat.

A recent Miami Herald investigation, Higher-Ed Hustle, showed how both the CIE and the Florida Legislature have enabled problem school operators through a combination of lax oversight and the passage of laws that gutted consumer protections. Lawmakers passed at least 15 laws that fueled the growth of for-profits, while weakening academic standards and giving the schools access to more taxpayer money.

The CIE meanwhile, could not identify a single instance where it disciplined a school because of a student complaint — despite receiving more than 2,200 complaints over the past 15 years.

Under state law, most of the CIE’s board members are for-profit executives. Perez, the Dade Medical owner, was a CIE board member from 2009 to 2013.

At Thursday’s meeting, CIE Executive Director Sam Ferguson disputed the suggestion that his agency “stood around” when it came to Dade Medical. Ferguson said the college had operated with the approval of three different academic accrediting agencies.

“And yet we’re the ones who get slapped up the side of the head,” Ferguson said. “There’s enough guilt out there to spread around, up to and including the federal government.”

But the CIE’s newest board member, Baptist College of Florida President Thomas Kinchen, ended Thursday’s meeting by suggesting the CIE needs to be bolder. Gov. Rick Scott appointed Kinchen to the seat in June.

“I’m amazed at how easily we seem to apologize for exerting our authority to protect students and independent higher education in Florida,” Kinchen told the rest of the board.

This story was originally published January 28, 2016 at 7:32 PM with the headline "State slams Dade Medical College, says it closed illegally."