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UPDATE: Investigation into student aid for Argosy students ongoing

Argosy University is located on the ground floor of the Haleck Building in Ottoville.
fili@samoanews.com

Pago Pago, AMAERICAN SAMOA — Federal court-appointed Receiver, Mark E. Dottore, is conducting a “forensic investigation” into how student aid from the federal government was drawn down and not disbursed for stipends to students attending Argosy University and other institutions that are owned or previously owned by Dream Center Education Holdings, LLC (DCEH).

This is according to an allegation cited in the latest filing at the federal court in Cleveland, Ohio, which is overseeing a complaint against DCEH, accused of failing to pay outstanding invoices to Digital Media Solutions LLC., which filed the lawsuit last month.

As required by the court, Dottore had filed on Feb. 19th a status report dealing with student financial aid money for Argosy student stipends. In that report, the Receiver stated that he continues be in discussions with the US Department of Education (USDOE)  for a possible advance of $13 million under federal student aids so students of Argosy can get their stipends paid. (See Samoa News Feb. 20th edition for details.)

But last Friday, Dottore filed a “revised and amended” status report, saying that since the Feb. 19th status report, the Receiver “was troubled by persistent rumors” regarding federal stipends for students and conducted a fresh and more thorough investigation, according to the report, which was filed by the court-appointed attorney for Dottore.

“As a result of this investigation it has come to the Receiver’s attention that there may be irregularities in the method and manner used by some or all of the pre-Receivership Dream Center Entities to request” USDOE Title IV funding, “in particular with respect to draw downs of accelerated” student stipends, the report explained.

According to the report, it “appears that amounts improperly requested by the pre-Receivership Dream Center Entities and then advanced” by USDOE “were not remitted to students, either before the submission of the request for payment — as was required — or after the money was received by the pre-Receivership Dream Center Entity.”

It also appears that when the funding was received by the pre-receivership Dream Center Entities, “it was used to pay their operating expenses.”

The Receiver is in the “preliminary stages of a detailed, forensic investigation and will pursue other and further information about the particulars of the advances of student stipend money, including the exact methods used to trigger the advancement of these funds, the exact amount of the funds advanced and not paid over to students, and the persons involved in the procurement and uses of the student stipend funding,” it continues.

There’s no indication in court records on when the Receiver will complete his investigation.

Meanwhile, the landlord of the building which houses Argosy at Santa Ana, California, has asked the court to vacate its order appointing the Receiver or, in the alternative, modify the terms of the Receiver Order.

According to court filings, Sunflower LLC owns the 55,000 square foot building, which is occupied by Argosy and the lease is “unconditionally guaranteed” by DCEH and expires June 30, 2020. The current monthly lease amount of approximately $235,937.68 — consists of $140,224.75 in base rent, about  $84,477.81 in additional rent and $11,235.13 in late fees.

Sunflower is currently owed unpaid rent for January and February 2019 in the amount of $471,875.36, court documents state.

Sunflower, which is also seeking to be a party in the case as a Movant, argued that Receiver Order bars Movant from collecting rent and protecting its property rights in California. The court has given all parities involved in this particular case, until next month, to file responses pertaining to Sunflower’s request.

As of yesterday, there were more than 20 individuals and businesses who are parties in this case, according to court records.