Courts - California Fine arts schools sued for fraud

LOS ANGELES (AP) -- The owners of Southern California art and design schools were sued for fraud Tuesday by dozens of immigrant families who claim they were lured into paying tuition for courses that were never completed because the company folded. The suit filed in Los Angeles County Superior Court also claims defendants Trisha Ying Zi Zhang and Edgar Kuckelkorn falsely promised students could intern at prominent companies and obtain scholarships from and admission to elite colleges such as Yale and Harvard. The suit alleges that from 2005 to 2009, the couple took some $1.5 million in tuition from 77 families for admission to their Montecito Fine Arts Inc. schools in suburban Monrovia, Arcadia and Brea. Majid Foroozandeh Shahraki, an attorney for the company, said he had not seen the lawsuit and could not comment on it. However, he denied the couple intended to defraud anyone. "It's really unfortunate. It's a sign of the economy and a lot of businesses are going out of business," Shahraki said. "Nobody wanted to see a school go out of business but a sharp drop in the tuitions that were coming in and enrollments basically caused the school to file for (bankruptcy) protection." The lawsuit alleges fraud, negligent misrepresentation and violation of state laws. It seeks unspecified damages and asks the court to rescind the school contracts and permanently bar the couple from unfair business practices. The suit claims the couple took prepaid tuition even though they knew the campuses were in financial trouble. The schools went bankrupt last year. "This was a concerted, well-orchestrated scam by two individuals to cheat parents out of their hard-earned money by promising benefits to their children and by exploiting immigrant communities' uncertainties about how best to navigate the American educational system," said Julie A. Su, litigation director at the Asian Pacific American Legal Center, a nonprofit agency that filed the suit along with a private firm. The couple offered a portfolio program that falsely claimed it would provide high school or college credits, and its ads "included overinflated, false promises regarding the overall high quality of classes offered," according to the suit. Yu-Chen Lin, a single mother of four, said she enrolled her children in Montecito's 3D animation portfolio program and paid $75,240 tuition in advance. "I lost all my savings for my children's education, and now my children have lost interest in art," she said in a statement issued by the Asian Pacific legal center. The school was forced to file for final Chapter 7 bankruptcy last year after financiers who were going to help backed out, and "there was no hope of reorganizing it," Shahraki said. Published: Thu, Jul 1, 2010

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