The state’s Office of the Attorney General (OAG) just announced a $5 million preliminary settlement has been reached with Stone Academy, a former nursing school shut down amidst student allegations of fraud. The money will be used to assist former students in furthering their education.
“Stone Academy unconscionably deprived its students of the education and opportunities they were promised,” said Attorney General William Tong. “Those wasted hours and deferred dreams are impossible to fully recover. This preliminary settlement returns millions of dollars back to the students who were harmed, and provides new, legitimate opportunities for real training and career advancement.”
From 2019 to 2021, Stone’s owners, Joseph Bierbaum and Mark Scheinburg, were alleged to have raked in millions of dollars from the school while failing to provide the resources necessary to adequately instruct students, or keep the pass-rate high enough to remain open under state regulations. Stone Academy knowingly violated numerous state laws and engaged in false advertising, leaving paying students without the credentials or knowledge necessary to take or pass their nursing exams.
Stone’s fraudulence also impacted state metrics. The closure of Stone Academy in 2023 was cited as a significant factor for the state’s failure to meet its annual nursing graduation target in the 2023 Nursing Education Report, released last month by CT Data and the CT Center for Nursing Workforce. Sen. Henri Martin (R-Bristol) recognized the impact that Stone’s closure has had on the state’s nursing education goals in a statement released earlier today.
“Stone Academy students were harmed by unfair and deceptive conduct, and the Attorney General’s ongoing efforts to pursue justice in this unfortunate situation are appreciated,” said Martin. “We have a nursing shortage, and it is essential that we continue to work across multiple branches of government to help these students get their careers back on track and make them whole.”
The settlement will provide affected students not only with cash payments, but will also allow students to take remedial programs and complete their nursing education at Griffin Hospital School of Allied Health Careers. Bierbaum and other former school officers have also been barred from seeking employment in higher education for five years, and once those five years have elapsed, must notify the OAG if they intend to own or operate any other for-profit school in Connecticut. In return, all suits raised by the state against Stone’s owners, as well as the class action case raised by nine former Stone students, will be dropped.
The OAG has also petitioned the federal Department of Education to wipe student loan debt related to Stone Academy, and has pledged “to work with students in the class action seek state legislation this session to enable additional reimbursements of out-of-pocket tuition costs incurred by Stone Academy students, as well as support to help former Stone students obtain careers in healthcare,” per the OAG’s statement.
“We will continue to work alongside Stone students to seek additional relief—including loan forgiveness and potential state aid—to provide every remedy possible,” said Tong.
Per the state’s lawsuit, which was originally filed in July 2023, Stone advertised that its programs would “prepare and assist students in acquiring the basic knowledge and skills necessary to be hired into an entry-level position as a Licensed Practical Nurse,” as well as prepare students to take their NCLEX-PN, the exam required to become a licensed nurse. Tuition for the two-year program was $30,000 a year, not counting other fees or expenses.
Nursing students must complete 750 clinical hours in order to be eligible to take the NCLEX-PN. Stone advertised that its “dedicated staff” of “industry leading professionals” would provide students with 860 clinical hours. In reality, Stone’s staff was composed of entry-level and associate degree nurse instructors, not permitted to instruct the coursework Stone ascribed to them under state nursing law.
Stone not only failed to provide students with capable instructors but also failed to provide students with the minimum 750 clinical hours necessary within the agreed upon two-year timeframe, as a result of the academy signing up more students than its staff or facilities could handle. Instead of slowing down or halting enrollment to fit the school’s capacity, Stone officials instead violated state law by attempting to count hours spent on campus, instead of at a licensed hospital or clinical setting, as clinical hours.
“Stone’s students could not graduate within the timeframes that Stone had promised because Stone had developed a backlog of over 1,000 students waiting to complete clinical hours by late 2020,” reads the suit. “Many Stone graduates are currently ineligible to sit for the NCLEX because Stone did not even provide them the 750 clinical hours required to take the exam. As demonstrated by its dismal NCLEX pass rates, Stone failed to adequately prepare its students to take the NCLEX exam, despite promising to do so.”
Bierbaum, the owner and CEO of Stone Academy from 2013 until he took the position of managing member in 2021, was found to have frequently redirected staff and millions in tuition money from Stone Academy to other businesses owned by him. Several Stone Academy staff members simultaneously held jobs at Stone Academy and Paier College, another school Bierbaum purchased in 2019, and at other companies owned by Bierbaum. Bierbaum loaned $2.5 million of Stone’s money to a network of affiliated family businesses and used Stone’s assets to secure “at least $3.3 million in mortgages by two affiliated entities,” per the suit.
“Through Bierbaum, Stone diverted these funds to Paier College, even though many of its students lacked books and lab supplies that they paid for, adequate classroom space and even, at times, adequate heat and running water,” read the suit.
Stone ultimately shuttered its three campuses, located in East Hartford, West Haven and Waterbury, on Feb. 15, 2023, with the knowledge that its NCLEX-PN pass rates were continuously falling short of the state’s requirements. Despite being placed on “conditional approval” in 2019 by the state’s Department of Health due to its insufficient pass rates, Stone failed to inform the public and continued to enroll new students even after two of its campuses had their approvals revoked in December 2021 and June 2022.
The terms of the preliminary settlement will be filed today in Hartford’s Superior Court, and must await court approval. If approved, a hearing will then be scheduled for the judge to evaluate and potentially approve the settlement.
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