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(NORWALK) – Attorney General Bill Lockyer announced his office today seized evidence from California Alternative High School (CAHS), after obtaining a court order appointing a receiver to run CAHS and freezing the assets of the school and its operators, who have defrauded mainly Latino consumers by charging hundreds of dollars for worthless diplomas.
"This scam is especially disturbing because it exploits immigrants trying to improve their lives and the lives of their families through education," said Lockyer. "What's worse, these rip off artists have cloaked their con in religious faith, and duped well-meaning clergy and their congregations."
At Lockyer's request, Los Angeles County Superior Court Judge Daniel Solis Pratt on Wednesday issued a temporary restraining order (TRO) freezing the defendants' CAHS-related assets, and appointing a receiver to manage the business. Pursuant to search warrants, agents from Lockyer's office today seized evidence from the defendants' offices and the home of CAHS "principal" Daniel Gossai.
Lockyer filed a consumer protection lawsuit on Monday against Los Angeles County-based CAHS and Gossai. The lawsuit seeks full restitution for victims, civil penalties of at least $32 million and an order that permanently stops the defendants' illegal business practices. The asset freeze will preserve the state's ability to collect victim restitution and civil penalties. The receiver will run CAHS pending the outcome of the case, which will help prevent the defendants from draining or hiding ill-gotten assets.
Aside from CAHS and Gossai, other defendants include: West Side Education Corporation (West Side), which bought the rights to use the CAHS scheme about four years ago; David Soto, president of West Side; Noel Brito, director of West Side; Fabricio Sandoval, director of admissions and instructor at CAHS; Janira Jacobs, administrator and teacher at CAHS; and Janet Gossai, wife of Daniel Gossai.
CAHS operates mainly out of Paramount and Huntington Park, and conducts classes in about 30 locations in California. In their marketing, the defendants target Latino immigrants. The defendants charge consumers from $450 to $1,450 for a 10-week, 30-hour course, and tell victims they will earn a high school diploma, the complaint alleges. Students are told the diplomas will help them win admission to college, obtain financial aid and get a higher-paying job, according to the complaint. In reality, the CAHS diplomas – handed out at "commencement ceremonies" – are useless for any purpose, the complaint alleges.
The defendants' business practices violate state laws prohibiting unfair competition, and false or deceptive advertising, according to the complaint. Lockyer's office investigated the case jointly with the Los Angeles County Department of Consumer Affairs (LADCA). The LADCA brought the case to the attention of Lockyer's office after receiving numerous complaints from CAHS diploma recipients who were rejected for admission to vocational programs or fired from their jobs for not having a high school diploma.
"This type of fraudulent activity will not be tolerated in Los Angeles County," said LADCA Director Pastor Herrera Jr. "It is unfortunate that unscrupulous business persons will victimize limited English-speaking and low-income consumers who desperately want to improve their educational skills and quality of life."
In marketing CAHS, the defendants claim the school is recognized by the federal and state governments. Neither is true, the complaint alleges. They also claim CAHS graduates can gain admittance to accredited colleges. In fact, CAHS' program does not meet the requirements of such colleges, including California State University and the University of California, according to the complaint.
Declarations filed with the court to support Lockyer's TRO request provide evidence that the education received by CAHS students is woefully inadequate. According to the declarations:
CAHS does not use textbooks, but instead gives consumers a 54-page workbook; the workbook contains numerous factual errors, including a statement that the U.S. government has four branches (executive, legislative, judicial and administrative); students are taught the United States has 53 states, and that the flag has not been updated to reflect the additional three states; and students are taught that in Congress one house is for Democrats and the other for Republicans.
The TRO support declarations also reveal that Gossai, to enhance his credibility, insists on being called, "Dr. Gossai." But of his two alleged doctorate degrees, one is phony and the other of questionable validity. Additionally, according to the declarations, Gossai claims to hold a lifetime credential as a community college instructor. However, he holds no teaching credential. Gossai was fired from his teaching post at Victor Valley Community College for immoral conduct, dishonesty and unfitness for service. The dismissal is chronicled in an unpublished state appeals court decision that upheld Gossai's firing.
In perpetrating the CAHS fraud, the defendants have described the school as the fulfillment of their divine mission to help Latinos escape poverty through education. To further that deception, CAHS frequently holds classes in churches with the help of unwitting clergy and congregation members.
Lockyer's lawsuit is the latest in a series of legal problems encountered by Gossai and CAHS. Nebraska Attorney General John Brunig has sued Gossai and CAHS for unfair business practices, and Iowa Attorney General Tom Miller sued them for failure to adequately respond to a subpoena. Former CAHS students also have filed small claims actions to get back their tuition.
Consumers who believe they have been victimized by CAHS, or a similar scam, can contact the Attorney General's Office at http://www.ag.ca.gov/consumers/mailform.htm or by writing to the Public Inquiry Unit of the Attorney General's Office at P.O. Box 944255, Sacramento, CA 94244-2550.