Former students who say they were defrauded by a Gig Harbor-based vocational school have won a $9 million settlement, and might get tens of millions of dollars more.
An insurance company for the defunct Business Computer Training Institute agreed to pay $9 million Friday to settle claims that the school preyed on low-income students, charging them nearly $11,000 for 30 weeks of basic computer training that some instructors say wasn’t worth it.
The ex-students also have reached a tentative agreement with BCTI that could yield an additional $55 million from a second insurance company.
Tony Nguyen, one of more than 600 former students who has sued the school, was ecstatic when he learned about the settlement Friday night.
“I’m like, ‘God bless, man!’” Nguyen said. “They’ve got it coming.”
If approved by Pierce County Superior Court Judge Thomas Larkin, the settlement would close one phase of a class-action lawsuit filed two years ago, just before BCTI closed its seven campuses in Washington and Oregon.
The lawsuit claims BCTI targeted low-income students, promising high-tech training and good-paying jobs after graduation.
Instead, ex-students say they got substandard training and low-wage jobs at fast-food restaurants, retailers, convenience stores and telemarketing firms.
If youre a former BCTI student interested in more information on the lawsuit against the school, contact Heather Spencer at 253-620-6620 or hspencer@gth-law.com.
Instructors said they were pressured to keep unqualified students enrolled so the school could collect their financial aid from federal and state governments. Some said the curriculum was flawed and riddled with errors.
The newspaper’s investigation revealed that BCTI had a history of run-ins with regulators, who doubted the school’s quality and financial soundness. The regulators threatened to shut the school down on numerous occasions but never followed through.
BCTI attorney Thomas Merrick could not be reached for comment late Friday.
In written statements and in court filings, owners Tom Jonez and Morrie Pigott and their attorneys have denied any wrongdoing. They said the school set out to help troubled students and that many BCTI graduates are happy.
They said they held recruiters to high ethical standards. And they said students signed disclaimers acknowledging that the school could not guarantee employment or wages.
The details of Friday’s settlement – including how the money will be divided among the former students – must still be worked out. Potentially, 28,000 students who attended BCTI from 1985 to 2005 could benefit.
“We’re just happy we were able to recover something for them,” said James Beck, one of the students’ attorneys.
But the litigation might not be over. Ex-students’ attorney Darrell Cochran said the parties have an “agreement in principle” on a stipulated judgment for an additional $55 million. The figure represents one-tenth of the estimated economic damages for the 28,000 students who attended BCTI.
Cochran said that money would have to come from a second insurance company that to date has refused to acknowledge that its policy covers the damages caused by BCTI. He would not identify the company.
The tentative agreement assigns BCTI’s claims against the insurance company to the students, who must now collect.
Cochran said it’s difficult to say how much additional money ex-students could win, but added, “There is a very good chance that we will get money that will help students out of financial burdens they incurred because of BCTI.”
Scores of former students told The News Tribune they borrowed thousands of dollars to attend BCTI.
Many later defaulted on their student loans and were hounded by collection agents. Some have seen their income tax returns garnisheed by the federal government.
The settlement announcement comes as Gov. Christine Gregoire is preparing to sign legislation imposing tougher requirements on for-profit vocational schools. The measure was inspired by the closure of BCTI and other vocational schools in 2005.
The measure will establish minimum financial standards for the schools, as well as minimum standards for their instructors and administrators.
It also would allow the state Workforce Training and Education Coordinating Board to place schools on probation and demand changes if they don’t meet standards.
Gregoire is scheduled to sign the bill into law on Monday.
David Wickert: 253-274-7341
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