The state has expanded its lawsuit against Stone Academy to include details about how the school’s owners enriched themselves by deceiving students, State Attorney General William Tong announced Monday.
Tong’s amended complaint details how Stone Academy owners Joseph Bierbaum and Creative Career Trust, an organization established by Goodwin University President Mark Scheinberg, took millions of dollars from their for-profit nursing school and purchased luxury vehicles and homes while breaking promises to students.
Tong originally announced in July that the state is suing Stone Academy, Paier College of Art, and its owners for violations of the Connecticut Unfair Trade Practices Act after the abrupt closure of the for-profit nursing school and its three campuses in East Hartford, West Haven and Waterbury. Tong called the situation “a textbook case of consumer deception.”
“Our amended complaint shows how Stone’s owners systematically siphoned millions of dollars from Stone, leaving the school financially incapable of living up to its promises,” Tong said in a statement.
Stone Academy’s revenues increased from about $660,000 in 2019 to more than $3 million in 2020 and 2021, according to Tong’s amended lawsuit. This increase coincided with increased student loan revenue, increased student fees, and federal COVID-19 pandemic aid.
While Stone Academy students were struggling with test scores and a lack of support, Tong’s amended lawsuit said the school’s owners paid themselves nearly $5 million in distributions in 2020 and 2021. Bierbaum proceeded to buy a $1.4 million, 9,000-square-foot mansion in Rocky Hill, and the school paid more than $100,000 to buy three luxury cars for Stone insiders,” Tong said.
The amended lawsuit also alleges that Stone’s owners used the for-profit school to finance their owner businesses.
As of December 31, 2021, Stone Academy had loaned more than $2.5 million to a network of affiliated family businesses, including Bierbaum’s Paier College of Art. The school’s assets were used to secure at least $3.3 million in mortgages by two affiliated entities, its landlords Oyster River and Olmstead Realty, and Sound Education LLC, the lawsuit says.
Tong said Stone Academy’s financial records show the school loaned $439,041 to Sound Education to help purchase property owned by the University of Bridgeport, where Scheinberg was a trustee. That property was then leased to Paier College of Art.
While student fees increased in 2020 and 2021, nursing exam pass rates were declining. Tong’s lawsuit said some students never received the textbooks they paid for. Further, many of Stone’s faculty were not qualified to teach practical nursing students.
The school didn’t provide students with the hours of clinical experience it was required to, and many couldn’t graduate on time because of the backlog of more than 1,000 students waiting for clinical hours.
Legal representatives for Stone Academy did not immediately respond to requests for comment.
