An amended complaint from Attorney General William Tong alleges that the owners of Stone Academy, a nursing school that abruptly shut down earlier this year, “systematically siphoned” money from the school and reaped millions from enrolled students.
Stone Academy closed its doors in February amid questions about the numbers of students passing final nursing exams, faculty qualifications and students’ clinical training. For months, about 850 students were unable to obtain their transcripts while the Office of Higher Education audited the academy’s records to determine the validity of its coursework.
When the audit came back in the summer, The Office of Higher Education determined that fewer than 140 students were eligible for a teach-out plan, a 10-month program that would allow them to obtain their certificates. The majority of students were left with the options of starting over at another nursing school or quitting their studies completely.
“Our amended complaint shows how Stone’s owners systematically siphoned millions of dollars from Stone, leaving the school financially incapable of living up to its promises,” Tong said in a news release.
“Stone Academy promised an education that would position students to become Licensed Practical Nurses in less than two years, with hands-on training from industry leaders. The evidence shows otherwise,” Tong said. “While Stone students struggled in unheated classrooms without textbooks, experienced teachers, or promised clinical experiences, Stone’s own financial records show how Stone’s owners hoarded millions of dollars for luxury cars, mansions, and their other businesses. The more we investigate, the more greed and lies we uncover. This is a textbook case of consumer deception.”
In July, Tong first announced that the state would sue the school, along with its owner Joseph Bierbaum and an art college also under Bierbaum’s ownership. Tong claimed that Bierbaum took the tuition of hundreds of nursing students and used it to promote Paier College of Art, a private institution in Bridgeport. He also alleged that Bierbaum’s operations had numerous violations of the Connecticut Unfair Trade Practices Act.
“Stone’s so-called ‘dedicated’ staff were also running Paier and in one instance Bierbaum’s own home improvement contracting business,” Tong said in July.
Tong’s amended complaint comes as a result of a “continued investigation and work on this matter,” said a spokesperson from the Attorney’s General office.
The complaint now claims that the school’s revenues “swelled” as their nursing exam pass rates “plummeted” during the COVID-19 pandemic, including how Stone’s net income increased from about $660,000 in 2019 to over $3 million in both 2020 and 2021.
“These earnings were fueled by federal dollars in the form of student loan revenue and COVID-19 emergency aid. Stone also earned money from extra ‘books and fees’ charges paid by its students. Stone’s income from student fees increased from $1.8 million per year in 2018 to over $3 million per year in 2021. Yet, in many instances, students did not receive the books they had paid for, struggling to learn from photocopied handouts instead,” the complaint read. “Despite this and its other conduct that deprived students of essential tools for success, Stone blamed its faltering NCLEX scores on ‘[s]ocial issues in our student population … from food insecurity, childcare, academic struggles, and transportation’ and the potential for cheating on remotely proctored exams.”
The complaint added that the school’s owners, Bierbaum and his step-father Mark Scheinberg, earned “$5 million in distributions for 2020 and 2021 alone, far exceeding the distributions from 2019.”
Bierbaum also “bought a $1.4 million, 9,000 square foot mansion in Rocky Hill with a pool, tennis court, four-car garage, and a koi pond” in 2020, according to court documents.
Perry Rowthorn, the attorney representing Stone Academy, did not provide comment.
Senate Republican Leader Kevin Kelly commended Tong’s new efforts.
“I applaud the Attorney General for continuing to pursue justice in this unfortunate situation. Stone Academy apparently did not fulfill its promise to its students, and for that, there must be consequences,” Kelly said. “In the legislature this year, we worked in bipartisan fashion to pass legislation to provide direct relief to former Stone Academy students. We have a nursing shortage, and it is essential that we as elected officials work across multiple branches of government to help these students get their careers back on track and make them whole.”