Monday, February 25, 2008

AG Corbett Ignores LV College Students Scammed by College Lenders

In 2005, the Morning Call reported that Lehigh Valley College - a for profit educational institution - was practicing deceptive loan practices that resulted in unemployed graduates unable to pay off high interest loans.

Incumbent Attorney General Tom Corbett settled a 2 1/2 year investigation by letting the college buy its way out of trouble. Price tag? $200 grand. Chump change for LV College owner Career Education, whose annual revenue is $1.7 billion. Incidentally, not a dime of that money goes to the students who were actually defrauded. In its editorial headline, The Morning Call concludes this "settlement" seems unfair.

District Attorney John Morganelli, Corbett's likely opponent in the next AG race, agrees. John tells me "leaving the victims completely out of the financial settlement is a shocking and a self-serving result."

He's asking AG Corbett to re-open the case, a permissible practice when further proceedings are in the public interest. Even if Corbett refuses, Morganelli wants all settlement proceeds immediately redirected to the actual victims in a pro rata distribution. Here's some of what John has been saying.

The law under which the Attorney General acted is called “The Consumer Protection Law.” The key words here are “Consumer Protection.” What part of the words, “consumer protection, ” did Mr. Corbett miss when he settled this matter, completely ignoring the “consumers” who were the victims of these entities. This settlement left the victims completely out in the cold with not one cent of restitution. The Morning Call investigation of this matter uncovered unscrupulous business practices, which saddled students and their families with loans carrying 15% interest, a rate associated with credit cards, not student loans. There are real victims out there with substantial debt. The Attorney General made the state treasury and his office the top priority while leaving students and their families with huge debts. It is quite frankly shocking that Attorney General Corbett put the state treasury, which received $50,000, and his own office, which received $100,000, ahead of the victims who were gouged with overly expensive tuition and high-interest loans. The first priority should have been recovering money for the consumer/victims, not the office of Attorney General.

Moreover, the amount and terms of this settlement shows a lack of interest in aggressively pursuing the matter and is inadequate for several reasons. First, the Assurance of Voluntary Compliance accepted by the AG is not even considered an admission by the company that it violated the law. Secondly, the amount of the settlement is almost laughable in light of the fact that Career Education Corp. is reportedly a company that generates revenue of $1.7 billion a year with about 80 for profit schools nationwide including a few in Pennsylvania. Third, the voluntary compliance applies only to LV College and not to other operations of Career Education Corp. leaving the company free reign to engage in similar practices elsewhere. After a 2 ½ year investigation, this is an embarrassing and totally inadequate result.

So Corbett ignores the actual victims of deceptive trade practices, but his own office gets $100 large. Is it because he's heavily involved in a major mob prosecution, like the DeNaples case? Nah, he's letting the Dauphin County DA handle that one. And he still has reached no decision on whether to prosecute political consultant Tom Severson's meltdown during a funeral mass, a matter that any cop could figure in about three seconds.

Update: The Morning Call and Express Times have both published Morganelli's recent criticism of AG Corbett's bizarre settlement, in which none of the victims are compensated. Corbett claims Morganelii does not know the facts. Does Corbett? He should have made an honest effort to collect the money owed to students. That's why he was elected.


Anonymous said...

Nice picture of Barack Obama, BOH.

Anonymous said...

So did this institution not disclose the rate of the loan to the students? Who signs a note without knowing the interest rate? Why am I feeling sorry again?

Bernie O'Hare said...

Who signs a note without knowing the interest rate? Kids, that's who. Me, too.

Anonymous said...

So, can I get my mortgage erased because I was duped by my lender? Oh yeah, that's already happening. Not for me though. I'm not pleading ignorance. Maybe I should.

What was the deception again?

Anonymous said...

The R's have held this job for thirty yrs. They have intentionally not unleashed the civil power of the office to make life better for citizens. The reason is when you fight for consumers you are generally fighting corporations. Take getting tough on oil companies. I believe in 2004 against Jim Eisenhower, Corbett got at $500,000.00 contribution from an Oklahoma oil magnate funneled to him through the National Attorney Generals' Assoc. or some such entity ?

Bernie O'Hare said...

So, can I get my mortgage erased because I was duped by my lender?

If you can establish that a lendor used predatory lending practices with you, you should be entitled to relief. That's why we have an AG in the first place.

Bill Villa said...

It's good to see a local DA standing up for victims.

Anonymous said...

Predatory as in I was shown the interest rate and chose to engage in a contract anyway?

Bernie O'Hare said...

Predatory as in I was shown the interest rate and chose to engage in a contract anyway?

First you say you were duped by your lender. Now you say you weren't. Looks like you are just trying to pick a fight. If you hacve something constructive to say, do so. So far you have provided no evidence of that ability.

Anonymous said...

Bernie and anonymouns,
I personally attended this school back in 2003 when they where still allentown business school. I can fully agree with the harsh tactics used to recruit students. When i showed interest in this school, by taking a tour, it was the biggest mistake I could have made. They must have called my house two to three times a day for about a week just to find out when I was coming to do financial aid.

I do believed I was dooped by their loan company, Sally Mae. I did realize when signing the loans that the interest rate was variable, and frankly while in school the rates where very good.

My rates while attending the school where 3% and 5% on the two loans I had. After my six month grace period, repayment on the loans began and almost instantly my interest rates where raised from 3% and 5% to 15% and 21%. Never in my wildest dreams would I think that a company would do that to someone who was looking to better themselves and get a better education. It was outright robbery in my opinion.

Also I felt that their teachers where there just for a paycheck. Getting help from a teacher after class was next to near impossible. As well the lessons taught in class where sometimes just down right useless. Take for example my psychology class. This class basically consisted of watching movies each day and then discussing them. As well during test time we were allowed to use our books, because we never actually learned any of the material in the book.


Bernie O'Hare said...

Nice picture of Barack Obama, BOH.

I've though about this all day. Let's see. We have a photograph of a young black man and you immediately make an Obama crack. if it were a opicture of a middle-aged woman, would it be a Clinton shoy? If it were a septuagenarian, would you claim it is McCain? I don't think you mean yto be insensitive, but think many blacks would be slightly offended by that remark. I don't think it's racist, but isn't it a tad insensitive?

Bernie O'Hare said...

Damion, Thanks for sharing your story.

Anonymous said...

I also want government to wipe my ass after making me whole on all the bad financial decisions I've made.

If Morganelli wasn't running - yet again - to get the hell out of NorCo he wouldn't give a shit about this issue and would stick to hunting down indigent illegals with Lou Barletta.

His transparency is disgusting. I simply don't trust him. And I believe this blog goes easy on him because he's taken the politically expedient courtesy to communicate with it (vs. other politicians who've ignored or scorned this blog - and been summarily lambasted by it).

Did we ever find out which Morganelli staffer sent out the hit piece on Casey last year? Was anyone identified, disciplined, fired? I want the full treatment on John Morganelli. I understand the courtesy and consideration for John Stoffa. Morganelli couldn't hold Stoffa's tractor keys.

Sign me .... a faithful, but disappointed reader.

Bernie O'Hare said...


I try to be fair to Morganelli. You seem to have made up your mind. I share your disdain for John's view towards illegal immigration. I don't like his view on the death penalty, either. He is more conservative, if truth be told, than most Rs. He takes money from Atiyeh, too much, in my view. And I've pointed that oput, too. Several times. His ties to Severson disgust me. I've made that clear, too. Although John never identified the person who sent those anonymous emails, he admitted he dictated them.

Those are John's negatives. Now here's a few of his positives. He is a very effective litigator, one of the best prosecutors NC has ever seen in a courtroom. I can't list the number of murder cases he's tried. As an administrator, he is the best DA the county has ever seen, keeping a low budget. His own ADAs type their own briefs, for example. He is readily accessible to just about anyone. When some old coot walked down the hall, it was JM who introduced himself and personally escorted the guy to the rest room. He has a very broad view of individual liberties, and reads the constitution's bill of rights more broadly than even I do. I had a conversation wiuth him a few weeks ago, and his views are very expansive, highly unusual for a career prosecutor. He actually encourages people with differing views.

I believe his criticism of Corbett is right on. Instead of letting a Dauphin County DA prosecute, the AG should assume that case. When he settles a scam against LV College, he should try to get some money back to the victims.

As a front line DA, he is very familiar with the drugs and gangs that are hurting our communities. That is his strongest asset. Our cities are unsafe, and we need a top law enforcement officer who actually will do something about it. Corbett seems like a fine man, but detached from the grim realities.

I won't hide his vices. But I recognize his virtues. I respectfully suggest you give this man a second chance.

Jake said...

This is his third chance. I don't know anyone who has actually had experience with his office, have the same views. Bernie, it is coming off to me as you doing some backdoor, passive aggressive campaigning for a crony.
My first hand experience with his office has lead me to believe that he will turn his head, that Law Enforcement is subjective, if it helps his career, he will do his job. This saber rattling on the LVC fiasco is just a opportunity to chest pound and ride the rinse cycle of others misfortune.

Has anyone else received a Robo call for Precision Marketing, asking for campaign contributions?

Bernie O'Hare said...


I deeply respect you and your work. I also empathize with what has happened to you. But I've noticed most men are just that - men. They have flaws and virtues. Morganelli has both. Corbett has both. The question is who will do a better job as AG.

As for your personal problems with that office, I'd be happy to tell your story but would rather tell it after it reaches a happy ending. I'd be happy to accompany you on any meeting you set up with that office.

Jake said...


Thanks, my work is my reason to be. Like everything in Politics, it is the lesser of Evils. From my perspective, I read your comment as "boys will be boys." Both of these characters can change someone's life and destiny with a "PEN" and because of that Authority they should be candidates for Sainthood-they both live in glass houses. I don't write the Rules to the game but I have expectations that those who do, will be honorable and play fair. Call me naive but truth does set you free.

Happy Ending?

Just curious what your perception of a Happy Ending would be? Does restoring 20 some years of Peaceful Quiet Enjoyment sound like a start and having those who willfully robed us of that sound like the beginning? My challenges stem way beyond his office, he is just a player in what I believe to be a shell game. I would be naive to believe that meeting with him would be more than putting me in a compromising situation, I prefer a paper trail-thanks anyway. Up till now, I haven't received any response to my letter to John Stoffa, which you have a copy of. So any expectations that Morganille is objective would be a Fairy Tale-no pun intended. I sense you as being a sincere man who has been to the Mountain but somewhat Naive when it comes to being caught in the Cross Fire and Cross Hairs of Hate.

A Happy Ending for us would be to have the same security and Peace of Mind that Heterosexuals take for granted. A happy ending would be for those who have Harassed us with Gun Fire be held accountable. Having the Lower Saucon Police answer our documented request including who took our mailbox down years ago to harass us and other numerous request would make us happy start. We were told that the Police participated in it. A Happy Ending might be a written answer from John Morganilli to our written request sent certified registered mail years ago asking if being sued by our neighbor and his DEAD wife was "good old fashioned County Style Extortion." A Happy Ending would be getting a written response from the Minsi Trail Council as to whether that insane Gun fire event that occurred on Good Friday, 2007, was indeed a Scouting event which the Policeman said it was. I remember, having been a Boy Scout, that Good Friday was a day of reverence and one of the Holiest of Christian Holy days. We believe this event was to show solidarity in the Hood (that the Scouts name was being used) and put us in our place by making us look foolish to have any expectations of accountability and we were picking of the Scouts.

This is only an aspect of what we have experienced so to have a real Happy Ending would be seeing accountability in all directions. I do believe it is going to happen-the wheels are turning. I not so pissed that this has happened to us, I am more pissed that it can happen to anybody. That the Powers that be put their interest before their obligations. I didn't write the Rules to the Game.

Bernie O'Hare said...

Jake, You have a right to that happy ending.

Anonymous said...

Lo and behold, I get robo-called from Morganelli today!!

Bernie O'Hare said...

Anon 5:12,

Dude, Are you serious??

Anonymous said...

A variable rate is variable. Plus, student loans should not have to be paid back until after you no longer attend full time. When I went to college, it was called a Guaranteed Student Loan. I don't see how the poster was "duped" when he knew full well the terms o the loan and the sleaziness of the admissions people.

No matter what Morganelli robocalls, it doesn't change the facts.

A.J. Cordi said...

Or perhaps the "sleaziness" wasn't known back then as much as it is now.

And perhaps students were flat out lied to.

Anonymous said...

I have been trying to keep up with this story, but I get busy to understand/read over all the presented information. I too have personally went to the college, back when it was Allentown Business School, and I am having a hard time remembering what the loans and rates were when I signed the papers, and if they were over the top in comparison or not. No, I didn't have to pay a dime while in school when I had my loans. I am concerned because as Damian mentioned, sometimes I feel because of the classes--their time frame and actual material discussion--along with all this investigation--along with all the discussions while I was attending about a lot of colleges not accepting their credits through transfer--that I really am not educated, or that my degree is not "legitimate"--therefore, did I get my money's worth or was it all a scam?? I will say that I was able to receive grants which helped a lot, and that when I started to repay my loan, I refinanced my loan to another lender that didn't have a "variable" rate. So, I'm confused. If I'm so clueless and didn't know what I was stepping into, then how was I able to figure out how to refinance my loan with another company that had a fixed rate, and why don't all the other students do the same??--because if students get some reimbursement, I want to see if I'm eligible for a "relief" too. I suppose that's basically my 2 major questions--was in fact my education legitimate, and why are students paying back loans at up to 20% interest rates, if there are companies who will refinance the loans with a fixed rate?? (Mine by the way is only 2.625%) Just me rambling on Bernie......thanks for the info again.

william said...

I also attended lvc college and was not aware of there outrageous interest rates. i owe about 50 thousand to sally mae. that school was nothing but broken dreams for several people.

sliding ed said...

When our child was 7 years he revealed that he was sexually assaulted by his first grade teacher. We filed a Police report with Colonial Regional Police and than were required to meet with Detective Hammer and Morganelli's assistant DA. In confidence and trust our son made his statement in Morganelli's Office. A bogus investigation followed along with a conflicting police report made by Detective Gary Hammer. Since they were not going to move forward in this case this Police report was supposed to be sealed and kept confidential, instead it was distributed through the mail. According to the Northampton Schools district response they stated they got a copy from Morganelli's Office. This confidential police report by my son and many other 6 and 7 year old children's statements which included full names and addresses have been made public. The Teacher was transferred when Detective Hammers son was placed in this Teachers first grade pod. When we confronted Morganelli he stated his office did not distribute this report and said there is no need for an investigation on how this confidential report was made public. Morganalli stated 6 and 7 year old children do not make good witnesses, even though he knew the school ditrict witheld and gave false information.
Through our experience this police report was not kept confidential! Answers are still left open and the cover-up continues.