‘I NEVER ADMITTED TO WRONGDOING’
EXCLUSIVE: SECOND OF TWO PARTS
Peter Chung, founder of the Eminata Group education empire, says he was innocent of 10,000 violations cited in U.S. class-action lawsuit
The second part of a two-part Province investigation into The Eminata Group, a Vancouver-based education empire with national reach. On Sunday, The Province examined allegations of questionable business practices by three Eminata schools. Today, The Province focuses on Eminata’s founder
and the active court cases before the Supreme Court of B.C.
On paper, his life reads like an American classic, the story of an immigrant kid who beat the odds to realize the American dream. Dr. Peter M. Chung, founder and executive chairman of the Eminata Group, had it tough.
Long before the money, the limos and the consular post, he was just a Korean-born teen living in a rough Los Angeles neighbourhood. He fought a lot and harboured a certain anger toward his dad, the pastor of a small Korean church, who earned so little that his wife was forced to work long hours to bring in extra cash.
“I was bitter towards my father, because I felt that he should provide bread for the family, not my mother,” Chung later told a Christian website.
But it wasn’t long before Chung, who demonstrated early an aptitude for business and making money, was realizing his own dreams of wealth, walking a gilded path through some of America’s most celebrated universities. UCLA, Stanford and Harvard are just three of the names that grace his corporate profile.
Soon, he was running a multimillion-dollar business enterprise that included schools and real-estate ventures.
Before it all fell apart, he used to take a limo to work and often travelled to Washington by private jet.
But in the 1990s the State of California took a special interest in Chung, in particular the vocational school he was running, Wilshire Computer College. His wife, Stephanie, was the school’s secretary.
A class-action lawsuit was launched but Chung, his assets frozen by a court injunction he admits to signing, says he was unable to pay his lawyer to mount a defence.
In the final judgment, handed down in 1993, it was alleged Chung and his companies had committed over 10,000 violations of state business code, including encouraging students to falsify documents so they could obtain federal loans; making misleading statements about employment opportunities; and lying about the school’s accreditation.
“Instruction was inadequate, in part, because teachers were not available to teach during the full class time the course was represented to require; WCC lacked adequate placement services; insufficient properly operating equipment was available on which students could practise; and with the possibility of a rare exception, WCC students did not obtain such high-paying jobs after graduation,” the federal court documents alleged.
Chung interprets the events differently and maintains his innocence.
“I never admitted to wrongdoing — to this day I don’t,” he told The Province in an interview.
“That’s a huge lesson I learned there, too. First of all, never sign an agreement, and always be judicious.”
He says he lost everything to the state and banks, but says he never had to pay the $12 million to the students.
In total, the Eminata Group has six schools under its brand, with campuses from B.C. to Quebec: Vancouver Career College, CDI College, University of Canada West, Reeves College, Vancouver College of Art and Design and PCU College of Holistic Medicine. UCW closed its Victoria campus last year.
In recent times, Chung, a board member of the Vancouver Symphony Orchestra and a B.C Liberal Party donor (he donated $10,000 in 2010), has been seen at events attended by the likes of former MP Stockwell Day and B.C. politicians Stephanie Cadieux, Colin Hansen and John Yap.
In separate photos online, he can be seen standing beside Premier Christy Clark and Prime Minister Stephen Harper.
But within the last two years Chung has found himself once again defending the integrity of his business enterprise, this time in B.C. Supreme Court.
The first case was launched by the Private Career Training Institutions Agency (PCTIA) in 2009, a B.C. regulatory body. Named as defendants were Vancouver Career College, CDI College and Vancouver College of Art and Design.
In a complex petition to the court, it was alleged that the schools were using sophisticated online searchengine-optimization techniques, such as buying Google “ad words” in the names of other institutions, to lure business away from their competitors. Several students were confused and misled by the conduct, the court documents read.
In a move that surprised the lawyer representing the PCTIA, Justice G.R.J. Gaul dismissed the petition in 2010, ruling that the advertising strategy in question wasn’t designed to mislead anyone.
The second case was launched by Vancouver Community College (VCC) in 2011. In another complex notice of claim, VCC alleged that Vancouver Career College, owned by the Eminata Group, was using VCC, a registered trademark, in its advertising campaign to deliberately lure business away from a competitor.
Vancouver Career College denied all the allegations in a counter claim and the matter remains before the courts.
“By no means [are we trying to direct traffic away],” Drew Lawrenson, spokesman for Vancouver Career College and CDI College, told The Province. “You’ve got two generic terms. You’ve got Vancouver and colleges. Those are two similar things. We are a career college, they are a community college. And we don’t want to be confused with them.”
In July last year, Danny Danha, Eminata’s former regional director of admissions and, later, its director of high-school liaison, alleged serious misconduct in a lawsuit against his former employers.
In his claim, Danha said he was headhunted in 2008 by Eminata’s vice-president of marketing and admissions, Larry Heinzlmeir, leaving his job with the Art Institute of Vancouver, a direct competitor.
Before being fired in February 2011, the claim states, Danha was approached numerous times by students who said they had received “inaccurate and misleading” information about class sizes, enrolment costs and student loans.
The claim alleges Danha also witnessed and was told to perform some of the following “unethical practices:”
To use “erroneous job-placement statistics” to try to “entice” potential students to enrol at Eminata’s schools; tell potential students that government funding was guaranteed and readily available to them, despite this not being the case; use the work of students from the Art Institute of Vancouver in a school marketing video and to “portray it as the work of” students from the Visual College of Art and Design (VCAD, Eminata’s school); and to acquire admissions-training materials, financial-aid booklets, enrolment agreements and application forms from the Art Institute of Vancouver so that Eminata could copy them and use them for VCAD and the University of Canada West.
Also included was the following allegation:
“Leading up to the B.C. Liberal election of 2011, defendant’s management encouraged the plaintiff and his co-workers to vote and support candidate Christy Clark because she would purportedly be advantageous for the defendant’s future in private education and would ensure that the defendant’s employees keep their jobs.”
All the allegations were denied by the Eminata Group in a counter claim and the case remains before the courts.
Lawrenson stands by the integrity of the schools, and notes they are regulated by the PCTIA. He also pointed to Vancouver Career College’s and CDI College’s job-placement rate, which sits at about 77 per cent, according to numbers he provided to The Province.
Students with complaints should access the proper channels so their concerns are resolved, he added.
“We are a very heavily regulated industry,” said Lawrenson. “All our programs that we offer are registered and approved by [PCTIA]. We work very closely with that organization.”
So closely, in fact, that one PCTIA board member, until recently, served in a dual role as senior counsel for the Eminata Group and a PCTIA board member.
His name is Royden Trainor, the same Eminata lawyer who met with Tony Des Lauriers, a former CDI College student who won a settlement with the school in small-claims court (as described in Part 1 Sunday).
Karin Kirkpatrick, the CEO and registrar of the PCTIA, has read all the online posts. But until the complaints against the Eminata Group have been made officially to her agency, she said, the PCTIA can’t investigate.
And that’s been the problem: none of the so-called complainants have stepped forward, she said.
“Until we actually have something from a student that comes to talk to us, it is very difficult for us to really do anything,” she said. “There’s been nothing egregious.”
Within the last year, she said, only two minor complaints were brought forward relating to Eminata schools, and they were resolved. They related to minor issues such as “administrative or policy handbook concerns,” she said.
She did, however, find the California court documents troubling. She said it was doubtful that those accrediting the schools at the time were aware of that history.
“If an application came in for registration today, and I was aware of a suit such as this one, I would not allow registration of that institution,” said Kirkpatrick. “That is something that would keep me from granting registration from a public’s bestinterest perspective.”
The first application by an Eminata school for accreditation was put forward around 1994 to 1995, she noted, before the existence of the PCTIA, which she said has a rigorous initial-accreditation process.
PCTIA also has a five-year review of accreditation and an annual review mechanism to which schools must submit, the latter consisting of less rigorous site visits. Not all of a school’s campuses are visited during these single reviews.
The five-year accreditation review isn’t conducted exclusively by PCTIA staff, but also by a contracted team of experts, said Monica Lust, assistant registrar at PCTIA.
The last time Vancouver Career College, CDI College and the University of Canada West underwent the more rigorous review was in 2009, said Lust.
The Province hadn’t received information it had requested about these audits by deadline.
As for the potential conflict of interest involving Trainor, who served in a dual role as Eminata’s counsel and a PCTIA board member, Kirkpatrick said that would have been handled under PCTIA’S conflict of interest policy. Broadly speaking, that means he would have left the room whenever a conflict arose. Trainor lost his board status at the same time that he stopped working for the Eminata Group last May.
Asked in an email about the quality of education being offered at B.C.’S for-profit schools, Advanced Education Minister Naomi Yamamoto reiterated PCTIA’S strict regulatory process.
She also cited the Degree Quality Assessment Board, another agency that monitors B.C.’S private institutions.
In the same email, The Province asked for comment on the California court documents. A copy of this email was in the possession of Randy Cox, president and CEO of the Eminata Group, when he arrived for a later interview with
The Province.
Asked how he came to be in possession of correspondence between a newspaper and the government, Cox replied: “People care about what we do.”
During the same interview, Chung was asked about the quality of education being delivered at his schools and the integrity of his business.
“I’m proud of our people [and] I’m proud that our students are becoming productive citizens of our society,” he said. “And I sleep well at night because I feel good about what I’ve done, about what we do as a team.”