The death of embattled Charlotte School of Law seemed to draw closer Tuesday after the North Carolina Attorney General’s Office ordered it to close. Davie Hinshaw The Charlotte Observer
The death of embattled Charlotte School of Law seemed to draw closer Tuesday after the North Carolina Attorney General’s Office ordered it to close. Davie Hinshaw The Charlotte Observer

Crime

Feds have launched criminal investigation of Charlotte School of Law, documents say

August 28, 2017 07:14 PM

UPDATED August 29, 2017 03:47 PM

Federal prosecutors in Charlotte appear to have been investigating Charlotte School of Law for more than a year, according to newly unsealed court documents in Florida.

In a statement released to the Observer, school leaders say they have cooperated with the Charlotte-based investigators, providing “information that we believed satisfactorily answered the questions raised.”

The filings by the U.S. Attorney’s Office for the Middle District of Florida came in a 2016 whistle-blower lawsuit filed by a former faculty member of the failed, for-profit school.

In her complaint, Barbara Bernier claims Charlotte Law and its owner, InfiLaw Corp. of Naples, Fla., defrauded U.S. taxpayers out of $285 million from 2010-15. Bernier’s lawsuit and other related documents were unsealed last week by a Florida judge.

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In an August 2016 court filing, Assistant U.S. Attorney Jeremy Bloor of Orlando, Fla., asked the court to keep Bernier’s complaint under seal while the federal government decided whether to join the case. He added that the U.S. Attorney’s Office in Charlotte “had initiated a criminal investigation” of both Charlotte School of Law and InfiLaw.

Bloor asked the court for more time so the Justice Department could interview multiple witnesses identified by Bernier as having “knowledge relevant to this case.”

“The government intends to interview these witnesses, as well as obtain and analyze relevant (Charlotte School of Law) records and data,” Bloor said.

Two weeks ago, when he filed a motion to have the case unsealed, Bloor said that while the United States was not intervening in the case at that time, its investigation continued.

How that involves federal prosecutors in Charlotte remained unclear Monday. A spokeswoman for U.S. Attorney Jill Westmoreland Rose said the office “does not comment on the existence or status of any possible investigation.”

Word of the federal investigation adds to the mounting legal problems for Charlotte Law, which officially announced it was closing last week.

Dozens of students already have sued the school in state and federal court. The N.C. Attorney General’s Office confirms that it has launched a consumer-fraud investigation of the school.

Charlotte Law had been on the verge of collapse since the fall of 2016 when the American Bar Association placed it on probation for chronic issues with admissions, curriculum and test scores. The U.S. Department of Education then made Charlotte Law the first accredited law school in U.S. history to be expelled from the federal student-loan program, resulting in the loss of tens of millions of dollars.

Given the dates spelled out in the unsealed court documents, the timing of the federal investigation would have placed Charlotte Law in the unenviable position of negotiating with one federal agency for the return of the loan money while it was being investigated by another.

In its statement, Charlotte Law says it last provided information to Rose’s office in November and said there has been no follow-up request from prosecutors. School leaders also repeated their assertion that Bernier’s lawsuit is “without merit.”

Michael Gordon: 704-358-5095, @MikeGordonOBS