Federal Probe Targets ITT Tech
3/2/2004 -- Classes are back to normal at ITT Technical Institute campuses across the country after federal agents raided the company's headquarters and 10 of its campuses last week in response to grand jury subpoenas and search warrants seeking various enrollment data.
Last Wednesday, agents searched ITT's Indianapolis, Indiana headquarters and 10 schools, including campuses in California, Nevada, Texas, Florida, Oregon and Louisiana. The grand jury subpoenas that triggered the searches were issued by a U.S. District Court in Houston, and sought data on student placement, retention, attendance and grades, along with recruitment and admissions materials, graduate salaries, and transfers of credits to other schools.
Classes were cancelled for the day at the targeted campuses, and students, faculty and staff were questioned. In a statement, a U.S. attorney in Houston did not give a reason for the raids. No charges have been brought against the company.
ITT spokeswoman Nancy Brown said today that the probe won't affect current ITT students, and will have no effect on anyone holding a degree from any ITT Tech school. "All the colleges are open and functioning perfectly normally," she added.
At an investor conference call this morning, ITT's chairman and CEO, Rene R. Champagne said he believes the company has had strong internal controls and that the investigation "will show that we're in compliance." Analysts who focus on the education market said the probe might be related to Title IV, a federal regulation that requires education companies to report certain student data related to federal low-income grants to states. According to company regulatory filings, about 68 percent of ITT's 2003 revenue came from federal education aid programs.
The federal raids immediately affected the company's stock, which fell from last week's high in the mid-50s to a low of $34.50 last Thursday. ITT Educational Services Inc. trades on the New York Stock Exchange under the symbol "ESI." News of the probe also affected the entire for-profit education sector, whose shares tend to fluctuate as a group. ITT was trading around $35 a share by mid-week this week, and the remaining stocks in the sector had largely returned to their pre-probe numbers. "In light of the pending federal grand jury investigation of the company and resulting shareholder class action lawsuits," Champagne said during Wednesday's conference call with shareholders, "the company is not able to confirm the internal goals and other projections for the Company's 2004 fiscal year that were previously disclosed by the company."
The dramatic drop in stock prices triggered several class action lawsuits by investors late last week - a common practice when a stock price drops substantially. The lawsuits claim the company artificially maintained or inflated its stock price by issuing false facts or omitting other pertinent ones.
ITT, with some 75 locations in 30 states, is the largest operator in the U.S. of post-secondary school technical education. It offers technology-based associate, bachelor and masters degrees in a variety of subjects, including computer programming, Web development, and engineering, to over 37,000 students. It also offers online education. According to the U.S. Department of Education, ITT granted nearly 15 percent of the total number of associate and bachelor degrees awarded in the U.S. in electronics and electronics-related programs in the 2000-2001 school year, the largest percentage of any single institution.  -Linda Briggs
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There are 166  user Comments for “Federal Probe Targets ITT Tech”
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Page 15 of 17
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| 5/1/04: NA from Texas says: |
ok this my sound kind of stupid, but if didnt help my class study on their lab final for intro to pc2, they wouldnt have made a very good grade, everyone one of my classmates, made a 100% grade average on the lab final except for 1 student his was 95%, I still consider it good enough, but the problem is I didnt get to do a singal lab out of the book except for 1, because I was always to busy helping my classmates, and i still got a 100 on everyone of the labs I never showed proof of doing, im not complaining, it just doesnt seem fair. Something needs to be done. |
| 5/1/04: Keith from ITT Tech Knoxville Tn says: |
I'm glad I trusted my "Gut" feeling and changed schools BEFORE it was too late. My son would have been going to ITT Knoxville on GI bill but a "Red Flag" warned us not to go there. Any college or school we had looked into before ITT when they knew the student was comming there with GI bill assistance would defer tuition for the first semester so as to give the Veterans Administration time to send the first checks because they realize it is a bit slow getting started. NOT ITT TECH! No, they wanted all the tuition for the first semester up front. That concerned me enough to do a "Google search" on the school, thus finding these comments. Long story short...We saved $32000! Our neighbors had allready paid in FULL, but thankfully they took our advise on what we were reading and decided to withdraw there son before he started classes...WHEW! Both my son and theirs are going to Pellissippi State Community College.....For a LOT less money, and much better reputaion. I figure this way, If a scool has enough money to buy all those TV spots, something must be wrong. Kind of like all the "Law Firm" advertisments. I don't think it would be a good idea to obtain an attorney off a television ad, so why would you base your education from the same media? Anyway, we are two families who dodged the bullet. |
| 5/1/04: Mike says: |
4/13/04 - Anonymous says: "Most accelerated schools or any school for that matter, are in the business of making money, because they get you woe you this that and all that glitters" The comments above have to be the most intellectual comments I've seen on this page. It's unfortunate that more people can't be the same. In my time I’ve met individuals from well know universities and colleges who have denigrated their educational institute for one reason or another. I’ve also known basketball and football players that received a B, when clearly, they should have received an F, but it was done in attempt to keep them on the team. So as I look at the negative comments about ITT, we must all realize that ITT isn’t the only school that has unethical acts occurring. Unlike ITT, some Universities and Colleges just have the size to cover up the unethical acts. In a sense, I would hope that ITT can continue to operate, but they must first deal with the people that have committed the unethical acts and incorporate more stringent requirements on ethics from the new employees. I think they have they best concept of many technical schools out there today. Remember those who attended the school made the choice to go and decision to stay and graduate. Therefore, we can only blame ourselves for mistakes. Another good comment from the anonymous individual is that “all schools operate for money.” Education in this day and time is a business. Check the salaries of some of the professors at popular Universities and Colleges. It’s not your high school teacher’s salary. |
| 5/3/04: Angel says: |
I wanted to get my attorney's permission before I gave out any information about the pending lawsuit. Now that I have it...anyone wanting to participate in this lawsuit against ITT Tech on behalf of students (and former students) who feel that you are (or have been) a victim of Consumer Fraud at the hands of ITT Technical Institutes nationwide, please contact my attorney's law firm: Emily Madoff, attorney WOLF POPPER LLP 845 Third Avenue, 12th Floor New York, NY, 10022 TEL: (212) 759-4600 FAX: (212) 486-2093 E-Mail: [email protected] I hope this information helps you...and any information you can provide about your complaints and circumstances will be very much appreciated. Sincerely, Angel from Indiana (e-mail me anytime for more info at: [email protected]) |
| 5/5/04: Unfortunate One in Knoxville says: |
Keith, I only wish i would have looked into ITT Tech a bit more before signing on the dotted line. At least we have a few success stories on here now. Pellisippi is alot cheaper huh? (Sarcasm) I am actually going to take some classes at Pellisippi and transfer the credits to ITT Tech. And i will save some $$$ by doing it. I can hear it now, if ITT found out, they would start their "Pellisippi is no good, we offer the best bla bla bla". Take my word for it, you just made the best decision of your life. I have made the worst. |
| 5/9/04: Anonymous says: |
I'm not sure but is this article about something that only happens in the USA? Whats it got to do with the rest of us???? |
| 5/9/04: Anonymous says: |
Your wrong!!!!!, this website is not biased towards Microsoft..., its biased towards people who live and work in the USA.... There actually is a far bigger world out there than just the USA and further more TEXAS is actually tiny little state, we have actual farms the size of Texas in Australia and they actually have fences around them. Look at where IT is growing the fastest, in countries like India and China whose populations dwarf the USA, so guess where all the IT dollars are going to to be spent? Comptia and Microsoft probably figured out long ago that if just a fraction of the populations take up certification as part of their career developement in these countries then there companies will be richly rewarded. I take my hat off to Microsoft and Comptia for not excluding the rest of the world and if people in the USA won't take your exams for one reason or another well it won't matter not one little bit as most of the money in future to be made lies outside of the USA. So certcites produce articles that relate worldwide as your readership will increase in huge numbers and far beyond the USA. |
| 5/10/04: Mike from Tampa, Florida says: |
You poor saps that have actually fallen for the ITT bull. We as employees and teachers do not give crap about what you do. We are just there for the pay check. Our director is a loser who never even bothered to get an education himself. Last I knew all he had was a high school diploma himself. Quit your crying and wake up guys. Go get yourselves a real education if you want to amount to anything. Or of of course you can keep making us rich. |
| 5/11/04: Sach from Tampa says: |
Check out www.animationarena.com Top Animation schools in the country ITT Tech(Game Design) DMAC (Special Effects) The Art Institute Online Collins College Westwood Online IADT - Tampa(CG animation) IADT - Toronto(game design) |
| 5/11/04: Rico from Los Angeles, USA says: |
The above message is correct. There are many good schools. Not all are traditional schools. Many teach the new technology. But is costs a lot of money. Traditional or modern? You choose. |
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