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Families claim
fraud in Ivy Ridge lawsuit
$100M
ACCUSATION: State diplomas unavailable despite ads
By CHRIS GARIFO
TIMES ALBANY CORRESPONDENT
Friday, July 28, 2006
ALBANY — A $100-million federal
lawsuit has been filed against the Academy at Ivy Ridge by former
students and their parents who say they were duped into believing
the school was licensed to award New York high school diplomas.
The lawsuit on behalf of 26 former
students and parents was filed late Tuesday in U.S. District Court
for the Northern District of New York.
In addition to the Academy at Ivy
Ridge and its corporate entities, defendants named in the lawsuit
include Jason G. Finlinson, Ivy Ridge's co-owner and executive
director; Joseph and Alyn Mitchell, who are partners with Mr.
Finlinson in owning Ivy Ridge; Robert B. Lichfield, who owns the
former Mater Dei College property where Ivy Ridge is located; the
World Wide Association of Specialty Programs and Schools (WWASPS), a
Utah-based company that includes Ivy Ridge among its affiliated
schools; the Northwest Association of Accredited Schools in Boise,
Idaho; and several companies that provided marketing services for
Ivy Ridge.
Christopher G. Todd, an attorney
with Hancock & Estabrook, the Syracuse law firm hired by the
plaintiffs, contends the case could represent the biggest example of
fraud perpetrated by a private school against its students and their
parents.
"Comparisonwise, I've never seen
anything like it in our research that comes up to the institution in
this action," Mr. Todd said.
Though 26 plaintiffs are listed,
the class potentially could include 226 people, Mr. Todd said. Many
of the plaintiffs are from New York but others are from California,
Connecticut, Massachusetts and South Carolina.
Mr. Finlinson, who has not seen the
lawsuit, said that he and Ivy Ridge had been the subject of
allegations before.
"It's not true," he said. "It's
just people trying to make a little money."
The filing will not affect another
lawsuit being prepared for state court by a New Jersey attorney who
is representing several former Ivy Ridge students and their
families, said the attorney in that action, Joseph S. Murphy.
"I don't want to put down these
guys' efforts, I hope they succeed, but class-action lawsuits are
always difficult, especially when you've got a deep-pocket defendant
and they are certainly that," Mr. Murphy said.
The federal court case likely will
have little or no effect on his suit, Mr. Murphy said.
"We're not just suing for monetary
damages related to fraud like they allege in this particular
complaint," he said. "We're suing for physical injuries to students
who attended the academy."
The lawsuit likely will be filed
within the next 30 days or so, Mr. Murphy said.
The federal lawsuit points to an
agreement reached nearly a year ago between Ivy Ridge and New York
Attorney General Eliot L. Spitzer under which the school paid nearly
$1.5 million in refunds and fines for fraudulently advertising that
it was fully accredited and for issuing high school diplomas when it
did not have authority from the state to do so.
Some 113 students had received
diplomas prior to the ruling. Under terms of the agreement, those
students, or their parents, received refunds of 15 percent of the
total tuition paid to Ivy Ridge.
Tuition averages $50,000 per year
with the typical student spending 18 months at the school. The
school has 210 students, according to Mr. Finlinson.
Ivy Ridge, located on Route 37 just
outside of Ogdensburg, also agreed to stop advertising that it was
accredited with the Northwest Association of Accredited Schools. The
school also was to stop issuing diplomas.
However, according to the lawsuit,
Internet sites used by WWASPS and "other Ivy Ridge-affiliated
entities" as of Dec. 13 continued to advertise that the school
issued either a "central diploma" or a "college-prep diploma." Such
claims violated the Assurance of Discontinuance that Mr. Finlinson
signed in settling the case with the attorney general's office.
Despite the agreement specifically
referring to Ivy Ridge's educational qualifications and business
practices as fraudulent and illegal, Mr. Finlinson continues to say
that he and the school did nothing wrong.
"We made mistakes and corrected the
mistakes. It had nothing to do with fraud or anything," he said
Thursday.
The lawsuit accuses Mr. Finlinson,
when confronted by parents asking about the agreement with the
attorney general, of telling them that Ivy Ridge's "accreditation
status was merely 'on hold' and/or that there was a minor 'error in
the paperwork' despite the fact that it had never been licensed or
accredited."
The suit accuses the defendants of
violating the federal Racketeer Influenced and Corrupt Organizations
Act by perpetrating a scheme to defraud parents out of $2,900 to
$4,000 a month in tuition payments.
The plaintiffs allege that the
Northwest Association of Accredited Schools participated in the
scheme by allowing Ivy Ridge to claim it was accredited through the
organization even though the school did not meet minimum criteria.
They also contend the organization falsely said high school credits
awarded by Ivy Ridge could be transferred to other affiliated high
schools or colleges.
Mr. Finlinson predicted his school,
which bills itself as a behavioral modification center for troubled
teens, would win the case if it comes to trial.
"I'm pretty confident they will
find no wrongdoing and we'll come out on top," he said.
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