Financial Advice

Operators of Online ‘High Schools’ Settle FTC Charges That They Misled Tens of Thousands Consumers with Fake Diplomas

Settlements ban defendants from selling or marketing academic degree or certification programs

The operators of two online “high schools” have agreed to settle Federal Trade Commission charges that they falsely claimed to be accredited schools but actually were little more than diploma mills that sold worthless pieces of paper.

The settlements resolve charges the FTC brought in February 2016 against Capitol Network Distance Learning Programs and Stepping Stonez Development, LLC, two separate diploma mills that used names like Capitol High School, Aberdeen Academy, West Madison Falls High School, Columbia Northern High School, and Heritage Western High School.

Under the terms of the settlements, the defendants are banned from marketing or selling any academic degree or certification programs. The orders also prohibit them from making misrepresentations about any product or service, including claims about the performance of any product or service, the use of testimonials, and accreditations or endorsements.

The FTC alleges that the defendants deceptively claimed that their online “high schools” were accredited, and that their diplomas would be accepted by employers, colleges and the armed forces. FTC alleges that in both cases, consumers who attempted to use these diplomas to get jobs, apply for college and even join the military found that their diplomas were not accepted.

The complaints named Capitol Network Distance Learning Programs, LLC, Capital Network Digital Licensing Programs, LLC, Veritas Sales, Inc., and their principals Nicholas Pollicino, Anthony Clavien, and Adam Pollicino, and Stepping Stonez Development, LLC, Intentional Growth, LLC, and their principal Stephen Remley. The settlements impose a $9.5 million judgment against Capitol Network and Nicholas Pollicino,  a $1 million against Veritas Sales, Clavien, and Adam Pollicino, and an $8.6 million judgement against Stepping Stonez, Intentional Growth, and Remley. After the defendants turn over virtually all of their available assets, the remainders of all three judgments will be suspended due to the defendants’ inability to pay.

The FTC’s Diploma Mills webpage contains information for consumers on how to spot fake diploma mills and other resources for consumers trying to improve their education credentials

The Commission vote approving the Capitol Network settlements was 3-0.  The Commission vote approving the Stepping Stonez settlement was 3-0.  The Stepping Stonez settlement was filed in the U.S. District Court for the District of Arizona on November 10, 2016, and was entered by the judge on November 30, 2016.  Both Capitol Network settlements were filed in the U.S. District Court for the District of Arizona on February 10, 2017. 

The FTC appreciates the assistance provided in these cases by the Better Business Bureau of Central, Northern, and Western Arizona, GED Testing Service LLC, the Advanced Distributed Learning Initiative, and the American Heart Association.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

This article by the FTC was distributed by the Personal Finance Syndication Network.

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