STUDENTS ALLEGING FRAUD BY NATIONAL AMERICAN UNIVERSITY

At one time, National American University, a Rapid City, South Dakota-based for-profit school system, had a few dozen locations in the United States, including ones in Independence, Overland Park, Zona Rosa and Lee’s Summit.
But in recent months, National American University has been closing its campuses and focusing on online education because of declining enrollment. A few weeks ago, National American University closed its two remaining campuses in the Kansas City area.
These school closings come on the heels of a lawsuit against the school system, filed in Jackson County MO Circuit Court. The lawsuit, filed on behalf of two former students, seeks damages for fraudulent misrepresentation, negligent misrepresentation, civil conspiracy and violation of the Missouri Merchandising Practices Act.
Attorneys for National American University removed the case to federal court but the plaintiffs’ attorneys of the Independence, Missouri law firm Humphrey, Farrington & McClain argued that the removal was improper. The court agreed and the case was remanded back to Jackson County Circuit Court where it is now pending.
Like other for-profit schools, National American University participates in federal student loan programs. The lawsuit alleges that National American University purposely entices prospective students to enroll and apply for student loans they cannot pay back through a systematic, deceptive marketing and recruiting scheme.
The scheme, as alleged by the plaintiffs in the lawsuit, included false statements by recruiters and financial aid officials about the true cost of attending National American University, the school’s accreditation for specific vocations, the quality of the teachers and courses, employment prospects and career placement services.
This lawsuit is not the only one that has been filed against the school. A federal lawsuit in South Dakota was filed by a former administrator and his allegations include forcing students to take out student loans for credit hours they did not need as they were waiting for the school to find them internships.
Per that suit, National American University had developed a bad reputation among health care employers in Minnesota because the students they hired for internships were woefully unprepared in their fields, so it had a difficult time filling internships.
The plaintiffs in the suit filed by Humphrey, Farrington & McClain had similar experiences to those students in that they were forced to enroll in unnecessary courses to get their degree.
“Collectively, we believe these tactics have systematically driven National American University’s enrollment practices and worked to the company’s great financial benefit, at the expense of its students, the federal government and the American taxpayers,” said Andrew K. Smith, attorney for Humphrey, Farrington & McClain.
Humphrey, Farrington & McClain’s success in taking proprietary schools to court started when it sued the owners of the Overland Park, KS-based Wright Career College in 2013. The lawsuit started out with four plaintiffs but grew to 264 within a year.
Attorneys with HFM secured a $3 million settlement that was shared among those plaintiffs.
The plaintiffs are seeking compensatory and punitive damages. Humphrey, Farrington & McClain has recovered more than $1 billion in damages on behalf of clients who have suffered injury or financial loss because of other people’s negligence.
For further questions, please contact Andrew K. Smith at 816-836-5050.