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 175  user Comments for “Federal Probe Targets ITT Tech”
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| 5/18/04: Glenn2 from San Diego says: |
Poeple! I f you want to do something about this then lets get together on what we should do. I am a victem of there lies and deciet also. My e-mail is [email protected]. I have some real horror stories from the San Diego campus. If you want to be heard then you need to speek up. And if you want no one else to suffer from thier scam then lets do something. Please this will not work with only one man. |
| 6/28/04: robert6687 from anaheim says: |
hey its funny , im posting this message and here i see at the bottom of the page, a link to ITT ! Anyways i go to tech school right next to ITT and employers wont even waste thier time to walk acroos the parking lot to look for qulaified applicants!! |
| 7/8/04: Anonymous says: |
I would like to get in touch with Methos from Michigan concerning the important issues raised in your letter to the U.S. Attorney, which we are investigating. Please e-mail me at [email protected] as soon as possible. Thanks, Chris |
| 7/19/04: jimh says: |
I am half-way through my second quarter. I am only doing online classes atm, and they are poorly designed. Most of the people in class don't even particpate and the system is horrible. I regret ever starting, and wish to get out. My fear is if they make me pay back the loans I have already aquired all at once. It's not a ton of money, but still, I hope they will allow me to make payments. |
| 7/20/04: Mike Johnson says: |
I am doing a research piece on ITT and am looking for current or former employees and current or former students who are willing to discuss their experiences (good or bad) with ITT. Be assured, conversations will be held completely anonymously. If you are willing to talk to me, please contact me at [email protected] with your name, phone number, and a good time to get in touch with you. We can converse through e-mail if you prefer. Thank you, Mike |
| 8/9/04: Anonymous says: |
in response to all of you whiners i offer the following, as an employee of ITT i can put a face to all of you losers who complain. First there are those who come to class late because they have stayed up all night with one hand on their "johnson" and the other on their X-box controller. Some of you are just one bong hit away from hanging yourselves in the basement after playing all day at D&D. Many of you have been losers since junior high and you come to ITT hoping we can straighten out 15 years of pathetic living in 8 quarters. For many of you we are your last stop. You cant make it in fast food, retail, or community service so you come to us hoping for a miricle. You wear out our instructors with your pathetic tales of car trouble, girl trouble, and money trouble. You will blame ITT for all of your problems-just like you will your wife, your boss and your kids. You will never accept responsibility for your own weak life. As for you women, many of you look like you rolled out of the back of your boyfriends camper, who has been living at the college parking lot. Some of the tools we use have more teeth on them than you do. And all of you ask the impossible-yes I know i have a felony record, yes i know i rarely show up to class, yes i know i have not bathed or combed my hair in months BUT could you please give me that 30 dollar an hour job reserved for those students who have applied themselves. Unfortunatley, we att ITT are required to take you. Finaly, I have seen many students come through the programs and excell in life. They do not blame the books, the teachers or the building. They came to class did their homework,kept themselves presentable and finaly were rewarded for their efforts. As for the rest of you i am sure there is a college of massage, medical transcrips, or cooking that would love to take you and your baggage. until next time... |
| 8/14/04: ceetstudent from wisconsin says: |
I am an 8th quarter student less than a month from graduation. I think that all of you who are complaining need to step back and take a serious look at what you know now compared to what you knew when you started classes at ITT. I agree there are those handful of instructors who can't teach for crap, but the majority of the instructors that I have had the PLEASURE of sitting under have known what they are talking about. I believe that you just don't want to blame yourselves for your bad experiences, so you are trying to find someone else to blame. Talk about babies! Start acting like the adults you claim to be! Grow up and take some responsiblity for yourself! If you did poorly at ITT, you have no one to blame but yourself! I am very satisfied with my experience at ITT, and while I am not continuing my education here I will recommend the school to anyone who asks if it is a good school. |
| 8/27/04: Long_Rod from Your mom says: |
I have a masters degree from ITT. I taught at ITT for a few years and decided it was not for me. ITT is just like all of the other backstabbing american corporations. They inflate the prices of their products. They have to advertise because they have an aweful product. They falsify the grades so that their corporate executive can get rich. They over market their crap with the fake tv and radio commercials. I say all ITT graduates and ITT past employees also start a civil lawsuit against these corporate back stabbing over paid executives. These executives will not care if you get stuck paying 30,000 to SallieMae for the next 20 years for a piece of paper that is not worth ten cents. I have over twenty years experience in the comupter industry. I am proud that ITT allowed the me the opportunity to get a degree with them, but if all of that is lost because of what the corporate executives are doing. Then, I pray that the Federal government will step in an protect and serve. Because thats what they are passionate about, and not becuase their is a buck in it for them. God help us all! |
| 8/30/04: Anonymous from Chicago, ILL says: |
I was a student at ITT Tech for 1 year as was my best friend. We should have caught on right away that this was a shady school. We attended the school in Mount Prospect Illinois. When we first went we thought it was promising. Half way through the first quarter we realized somthing wasn't right. Our teachers most of the time talked more about themselves than the material and actually forgot to tell us about the major project call "Tech Fest". It was kind of like a science fair that carried a lot of weight on your grade. We were supposed to have a month to create our project. We were not even told about it until 2 days befor it was due. We complained to the dean but she tried to tell us it was our fault for not asking about it. This was our first quarter, how were we supposed to know. This was the first of many dissappointing run in's with the administration. I was there for 4 quarters and every quarter I had one good class with a good teacher and 2 classes with teachers that I wouldn't trust to clean my toilet. I actually had a teacher for my Algebra 2 class that barely spoke english. She would not even answer any questions from the class. This is not even the worst of it. The worst part is that when I and my friend enrolled, they gave us the wrong loans. I was supposed to get the college advantage loan which is defferred untill 6 months after you graduate. Instead they gave me the Parent Plus loan. I had to start paying it off in my 3rd quarter and to topit all off, my name was supposed to be on the loan as the main borrower, and my dad's as the co-borrower. Instead the put his name as tha main borrower and I was not even mentioned. When I tried to ask the financial aid people about this they said to ignor the bills I was receiving in the mail and that they would take care of it. 5 months later when I was made aware by my dadd that the bills had in fact not stopped comming I asked again and was told that my loan could not be deffered and that it was the only loan they could have given me. Which was a blatent lie right to my face. When I argued they said I didn't know what I was talking about and I was brushed aside again. This whole situation went on for 7 months. I finally told them that I was dropping out because of their lies and that I did not want to have anything to do with that school. I am now 17,000 dollars in debt and have no degree to show for it. But I thought it better to leave and cut my losses than stay and get a degree that wasn't worthy to wipe my but with. To any prospective ITT students I say only s this. Do not go to ITT tech, they will tell you what you want to hear and steal as much money from yo as they can. |
| 9/8/04: lolo says: |
thank all , to stop me from doing 30,000 mistake. |
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