Los Angeles

School Administrators Deny “Pay to Stay” Charges

Students are scarce at closed schools named in "pay to stay" allegations.

Three men pleaded not guilty Thursday to federal charges of operating a "pay to stay" scheme at a network of for-profit colleges, even as four campuses remained closed.

The US Attorney's office had sought to keep the defendants in custody, but relented during a Thursday afternoon court session and agreed to their release after they posted bond.

A federal indictment unsealed Wednesday accuses Hee Sun Shim, 51, of immigration fraud, money laundering and other charges in connection with the operation of four schools. Also charged were underlings Hyung Chan Moon, 39, and Jamie Choi, 35, who allegedly assisted in the operation and management.

Shim's bond was set at $380,000. Bonds of $50,000 apiece were required for Moon and Choi to be released from custody. The court hearing was attended by some 15 relatives and acquaintances of the accused, some of them pledging property to guarantee the bonds.

The schools were certified under the federal Student and Exchange Visitor Program (SEVP) through which foreign nationals may obtain and extend student visas while they are studying at certified colleges and vocational schools.

Those educational institutions are required to report the enrollment of foreign students.

However, as many as 1,500 enrolled in schools owned and operated by Shim did not attend classes, and in some cases were living hundreds of miles from the schools they purportedly were attending, federal HomelandSecurity Investigations concluded after a four year probe.

The schools include three in mid-Wilshire: two campuses of Prodee University/Neo-American Language School, and what authorities identified as the Walter Jay MD Institute, though the sign on the door reads Hamilton College. A fourth school allegedly affiliated with Shim is Likie Fashion and Technology in Alhambra.

The 2011 spot inspection at Prodee that prompted the investigation found only three students in one classroom, and only one in another, said HSI Special Agent in Charge Claude Arnold during an interview.

All four campuses were closed during the Thursday morning and early afternoon period that NBCLA visited them. Doors were locked, and knocks and phone calls went unanswered.

During that time, NBCLA witnessed the arrival of one person who described herself as a current student at Likie.

Lisa Su said she had paid $6,000 for individual instruction in pattern design, and had attended several sessions since last year. She described her instructor as "professional," but also said she found it odd that during her visits to the school, she never saw more than a handful of students, and sometimes none.

Lisa Su said she does not require a student visa because since moving from China she has become a U.S. resident.

At Hamilton College, a note on the door referred to spring break, and disappointed a woman who said a friend had been recommended Hamilton to her as a school she should consider.

Linh Nguyen said she is from Vietnam and currently attending classes at an Orange County community college on a student visa, but hoping to move to Los Angeles.

Nguyen expressed surprise on being informed of the "pay to stay" allegation, and said such an arrangement has no appeal to her.

"No," said Nguyen. "I have to take full-time classes."

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