New York lawsuit targets local test-preparation company

New York's attorney general has filed a lawsuit against an Indianapolis-based seller of online nursing studies, alleging it deceptively induced up to 2,000 New Yorkers to sign up in hopes of obtaining an associate's degree in nursing.

Attorney General Eric Schneiderman said his office has obtained a temporary restraining order in state court requiring The College Network Inc. and its owner and CEO, Gary Eyler, to clearly disclose on all contract documents that it's not affiliated with Albany, New York-based Excelsior College and isn't a degree-granting program.

The College Network's headquarters is at 3815 River Crossing Parkway on the city's north side. The company was founded in 1995.

The suit alleges students were subject to high-pressure sales pitches and paid thousands of dollars for ineffective study guides that did not prepare them for the required exams for course credit and failed to provide required cancellation notices and refunds.

“Businesses operating in New York must conduct business fairly, and that means not using false and deceptive advertising to take advantage of consumers," New York Attorney General Schneiderman said in a written statement. "As we allege, hard-working New Yorkers – many of them single moms and immigrants – were duped into buying expensive, inadequate study materials and access to ‘academic advisors’ who were falsely touted as experts. Businesses that take advantage of people seeking to better their lives and communities deserve especially tough attention from law enforcement, and we will continue working to crack down on this kind of abuse in the education sector.”

A call by AP to The College Network's lawyer was not immediately returned. The Syracuse Post-Standard said law firm Harris Beach issued the following statement on behalf of The College Network.: "Mr. Schneiderman's bloviating statements are the real false advertising in this case. The law is clear and we have done nothing unlawful."

According to court papers, The College Network targeted licensed practical nurses and paramedics with online ads that created the false impression that The College Network was affiliated with Excelsior College and offered associate degrees in nursing that consumers could earn “in just 18 months.

Eyler, 67, is no stranger to legal troubles with the government. In the late 1980s, he and his former company, Carmel-based truck-driving school Continental Training Services Inc., were sued by the federal government for civil fraud. Continental operated Superior Training Services, the largest-truck driving school in the country at the time.

The U.S. Education department claimed in a 1988 lawsuit that it was entitled to $366 million from Eyler and Continental. It alleged Eyler falsified documents that made made students attending Superior eligible for federally backed education loans. Those loans represented the bulk of Superior's more than $50 million annual tuition income, the suit said.

The suit also said the students received inadequate training, resulting in a default rate on loans of more than 50 percent, leaving taxpayers on the hook for the debt.

The company eventually went bankrupt and settled its case with the government. Eyler was forced to sell off several pieces of valuable Indiana real estate, including a 336-acre estate in Brown County and Meridian Hills home.

Eyler continued to have IRS troubles into the late 1990s related to the Continental case.