Department of Education letter to Michigan Jewish Institute

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The federal Department of Education upheld the finding that the Michigan Jewish Institute committed Pell Grant fraud and has banned the college from funding.

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APR1 5 2016
Rabbi Kasriel Shemtov
Michigan Jewish Institute
6890 West Maple Road
West Bloomfield, MI 48322-3032

Sent Overnight Via UPS
Tracking Number: IZA879640195406575

Re: Denial of Recertification Application to Participate in the Federal Student
Financial Assistance Programs-Michigan Jewish Institute, 6890 West Maple Road, West
Bloomfield, MI 48322-3032; OPE-ID: 03284300
Dear Rabbi Shemtov:
On February 25, 2016, the U.S. Department of Education (Department) advised Michigan Jewish

Institute (MJI) that its application for recertification to participate in the student financial
assistance programs authorized pursuant to Title IV of the Higher Education Act of 1965, as
amended, 20 U.S.C. §§ 1070 et seq. (Title IV, HEA programs), had been denied. In this
February 25, 2016 denial, the Department found that MJI breached its fiduciary duty to the
Department by awarding Pell Grant funds to students who were not "regular students" as
required for the receipt of those funds. In addition, the Department found that MJI failed to
exercise required standard s of administrative capability by not maintaining consistent and
reliable student records. Finally, the Department found that MJI presented false information to
its accrediting agency. As the denial letter made clear, any one of these bases, standing alone,
was sufficient to deny MJI's request for recertification.
After seek ing and receiving an extension to its March 10, 2016 deadline to respond to the
Department's denial, on March 24, 2016, MJI submitted a 33-page response, plus 44 exhibits, to
factually challenge the bases for this decision. The Department carefully and thoroughl y
considered the points raised by that submission . Following its review ofMJl's contrary
contentions, the Department reaffirms its finding in all three areas and concludes that MJI's
rendition of events is inaccurate. Therefore, MJI is informed that the Department's decision to
deny MJI's recertification application is hereby affirmed and is the agency's final decision.

I. MJI Breached Its Fiduciary Duty To The Department

In particular, the Department noted that (a) nearly 2,000 U.S. citizens, who are Israeli residents,
received Pell Grants for "s tudying abroad" at Israeli institution s from 2006-2012, without ever

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Rabbi Kasriel Shemtov
Michigan Jewish Institute
Page2
studying at, or graduating from, MJI, 1 (b) 25 of30 students in 2012-2013 and 2013-2014, as
identified by a Department program review, were Israeli residents who received Pell Grants for
"studying abroad" at Israeli institutions without ever studying at, or graduating from, MJI, (c)
524 purported MJI students were enrolled in a computer degree program, with more than 75%
earning zero computer-related credits, and the vast majority of the rest having only one
computer-related course listed on their transcript, (d) Israeli resident students were enrolled fulltime, and graduated from, Israeli institutions, and (e) U.S. residents were not regular students of
MJI studying abroad.
In response to the Department's first finding , MJI claims, apparently, that all of these 1979
students were studying "on1ine," as opposed to "studying abroad," as MJI has otherwise
represented, and that 570 actually did graduate from MJI, while another 117 are still enrolled,
after many years, at MJI. (MJI's Response at 8-9. 2) The documents MJI submits do not
corroborate its conclusions.

In support of its claims regarding the 570 students, MJI submits the transcripts for 337 students.
(MJI Ex. 8.) How it believes these documents support its conclusions regarding the remaining
233 for whom no transcript was offered is unknown. All 337 transcripts-- which specifically
state whether the student graduated or not-- either say "no" on this score, or are blank. It is
certainly unconventional to claim that a student graduated when the student's transcript states
otherwise. Nonetheless, apparently, MJI is claiming that all 337 graduated because they
purportedly received a one-year certificate in Judaic Studies. 3 MJI's contention that these 570
1

In this regard, the Department expressed its awareness of wholly inappropriate advertisements in Israel soliciting
American citizens to enroll in MJI as a ruse to secure Pell Grants. After acknowledging that such advertisements
"seem(ed) widespread throughout the country" (MJI Ex. 15 at 2), MJI stated in its response that it acted properly to
disassociate itself from these ads. (MJl's Response at 12.) Yet, MJI included transcripts from students enrolled in
dubious partner schools in its Ex. 8. In fact, these transcripts show exactly what is wrong with MJl's behavior. For
example, MJI enrolled, from a single suspect yeshiva, in the same two semesters starting in the Winter, 2012, five
individual s with the same last name, two of whom, aged 66 and 24, are at the same address , and two of whom, aged
24 and 37, have consecutive social security numbers and must be male and female siblings, along with another
female aged 39 and another male aged 22 . (See MJI Ex. 8 at 1827-1856.) The fact that this yeshiva was enrolling
both women and men, along with the fact that these supposed students are related, are enrolling in the same two
semesters starting at an off time, that one is in his 60's, and none of the rest are ofa traditional college age, suggests
that, assuming these are real persons, they were responding to a "free -money" advertisement, without regard for
actual educational attainment. And yet MJI had no problems seeking Pell Grants on their behalf .
2

MJI claims that the Department's list of 1979 students " duplicates numerous students" and provides a few
supposed examples. Id. at 8, n.1. This statement is false. If students are listed twice on the Department's
Attachment A, it is because they were enrolled during nonconsecut ive years or because the Department has no
student transcript information, or because they attended two different schools in two years. The overall count of
unique students, however, is correct.
3

MJI's 2011-2012 catalogue describes this program as "intending to serve the needs of severa l different and unique
post-secondary student populations," and lists one as "stu dents already enrolled in BAS academic programs at MJI
who find quite attractive the ability to demonstrate academic milestone achievement by earning certificate(s) along
the way to completing their bachelor degree requirements." (ED Ex. 1 at 2.) Apparently this is the category in
which MJI believes all 337 of these students belong. MJl's catalogue further acknowledges that, "Students who do
not initially intend on continuing on to a Bachelor of Applied Sciences (BAS) Degree (as evidenced by an initial
application for both the Certificate and BAS in Judaic Studies) are not eligible for Title JV Financial Aid Programs."

Rabbi Kasriel Shemtov
Michigan Jewish Institute
Page 3
students "earned either a certificate in Judaic Studies, a bachelor's degree from MJI, or both"
(MJI's Response at 9, emphasis added), when not a single one earned a bachelor's degree, when
233 lack a transcript depicting anything, and when the rest received only a certificate from a nonTitle IV eligible program, is alarmingly inaccurate.
An analysis of the 337 transcripts reveals other stark peculiarities. The transcripts MJI supplied
show that students in Israel who were enrolled in yeshivas and seminaries were studying Jewish
texts and rituals, and students in the MJI online classes were studying the same subjects, leading
one to question why any student would enroll in MJI other than to obtain financial aid for their
otherwise ineligible Israeli program. Furthermore, the MJI online classes were not individually
selected by the students: in general, each semester of each year that MJI has run this program,
the same two MJI online classes were required of every female student, and a different set of two
MJI online classes were required of every male student. And it mattered not whether the student
was a first year student, a second year student, or any other: e.g., the female students in the Fall,
2011 semester in Israel enrolled in MJI Online courses took the same two Judaic Studies classes
(Rabbinical Literature and Jewish History-Second Commonwealth), and the same two Judaic
Studies classes in the Winter, 2012 semester (Rabbinical Literature and Jewish History-Biblical
Period), and the same two in the Fall, 2012 semester, and the same two in the Winter, 2013
semester. All courses consisted of Judaic Studies. The same pattern is seen for male students
with different classes. Without access to, and a review of, all MJI transcripts, it would be
difficult for any accreditor or auditor to understand that there was no permitted course selection
and that the rigid, and extremely limited, curriculum likely served no other purpose than to
disguise the absence of a legitimate academic program necessary to properly secure access to
Pell Grant funds.

As to MJI' s claim that 117 of its 1979 students are still in an active status (MJI Ex. 9), there are
likewise multiple problems. In particular, MJI claims that students who have been away from
the school for up to eight years have re-enrolled, some with no financial aid . In fact, it is
claiming that 48 students are "active" for whom MJI has not obtained any Pell Grant funds for
2014-2015 or 2015-2016, and 44 for whom MJI has not obtained any Pell Grant funds since
2012-2013, but were last enrolled as far back as 2007-2008. (See ED Ex. 2.) Yet, there is no
evidence offered that any of the "active" students without Pell Grants are paying tuition to MJI,
and otherwise remain actively engaged in the pursuit of a Bachelor's Degree which they initially
intended to pursue from MJI.
In MJI's Ex. 9, as was the case with MJI's Ex. 8, MJI cherry-picked students and transcripts in
order to make it appear that students in general have more MJI credits than is factually accurate.
Because MJI claims that some of these students are still enrolled and current, in order to make a
meaningful comparison, the Department analyzed all 1252 Israeli students as to whom it is
undisputed have had no connection to MJI since the 2011-2012 school year and evaluated their

Id . (emphasis in original.) The only Title IV-eligible certificate program that MJI offers is a different certificate
program in Talmudic Law and Jurisprudence.

Rabbi Kasriel Shemtov
Michigan Jewish Institu te
Page4
total credits, MJI credits, and percentage ofMJI credits of the total. Not only does MJI claim
none of these students as active, none of them have had any Pell Grants since 2011-2012.
For these students, the average percentage ofMJI credits is 13.4%, far less than the minimum
necessary for the type of contractual relationship that MJI contends it has implemented with
foreign institutions, and far less than is represented on the selectively chosen students contained
in MJI' s Ex. 9. More than one-half of the students, or 679, have zero MJI credits. Only 43 of
these no -MJl-credit students are included in MJI's Ex. 9 and only one of them has a transcript
included in Ex. 8. Not a single one of these 1252 student s has more than one year of MJI credits
(24). And not a single student has sufficient overall credits for graduation from any Pell-eligible
program in which they were enrolled. (ED Ex. 3.)

In total, MJI's Ex. 9 contains only 262 of the students whose connection with MJI concluded by
the end of 2012. (ED Ex. 4.) 160 of these students have no matching transcript included in
MJI's Ex. 8. It is not surprising that non-typical outliers will predominate in a skewed selection
of this type, and therefore MJI is able to make it appear from its Ex. 9 that 33% of the credits its
students have received are from MJI, two and a halftimes the actual percentage when this group
is looked at as a whole. Significantly, even taken at face value, this percentage of foreign
content, 66%, is still far beyond the Department 's maximum allowance of 49% for students
study ing at a Title IV ineligible institution with a contractual rel ationsh ip with an eligible
institution. 34 C.F.R. § 668.5(c)(3)(ii)(A).
It is also perhaps unsurprising that 25% of the students who are not included by MJI in either its
Ex. 9 or its Ex. 8 are in academic difficulty, with up to nine F grades on their transcript, and even
those enrolled in a small number of MJI online classes show Fs, Incompletes, or Ds in those
classes. In fact, there are 33 students who were actually enrolled in MJI classes who have zero
MTI credits simply because they failed all MJI classes or otherwise have all incomplete grades .
(ED Ex. 5.) This is what you might expect to see in a situation where the stude nts have no
incentive to do anyth ing more than the minimum-necessary amount ofMJI work in order to
remain Pell Grant-eligible, and is less likely the picture you might see of students who had
selected MJI as a schoo l where they planned to obtain a degree.
Relat ed to the claim s that MJI makes concerning its "ongoing" students are signatures provided
on behalf of a small number of them from the original graduating classes of 2016 and 20 17.
They purportedly voice their intent to receive a degree from MJI by sign ing a prepared statement
that includes the sentence that they "are greatly insulted by the suggest ion that [obtaining a
degree or other credential] was not our purpose or intent" when enro lling in MJI. (MJI Ex. 44.)
Of the students in the original graduating class of2016-- those who entered in the Fall, 2012,
representing 1051 students new to MJI-- only seven can be found in MJI's Ex. 44 . (SeeED Ex.
6.) In other words, less tha n 1% of the original class of2016 say that they intend to actually
obtain a degree in 2016. Another 17 of these 1051 say they will graduate a year later , in 2017.
(Id.) In total, no more than 2% of the original entering class of2016 are willing to say that they
are even potentially intending to obtain a degree with their class, or obtain a degree a year later.
Similarly, the Class of 2017 entered in Fall, 2013 , consisting of a cohort of 972 students new to
MJT. MJI produced statements from only 24 students out of the 972 who are willing to say that
they int end to obtain a degree in 2017. (Id.)

Rabbi Kasriel Shemtov
Michigan Jewish Institute
Page 5

The remaining students in MJI's Ex. 44 include seven who first entered the school in 2014 and
who could not possibly accumulate enough credits to support their representation that they intend
to obtain a bachelor's degree by 2017, three who entered in 2008, four who entered in 2009, 20
who entered in 2010, and 10 who entered in 2011. 4 There are 3582 students who first entered the
school from 2008-2011, almost all of whom have obtained Pell Grants, and virtually none of
whom have graduated. It is not surprising that MJI can find only a tiny number of these students
who are willing to state that they still intend to get a degree, however unlikely that may be.
Although not a surprise, these are still extraordinary numbers.
The Department's requirements are really not that all that remarkable. Nor are they difficult to
understand. For an institution to be eligible to receive Title IV funds, it must award those funds
only to eligible students. And for a student to be eligible to receive federal student financial
assistance, he or she must intend to receive a degree from the institution where he or she has
enrolled. Title IV funds are not available for the benefit of institutions; they are available for the
benefit of students attending those institutions. Here, MJI created a scheme with little or no
regard for the integrity of the Title IV programs, and the Department, as steward of these funds,
must end MJI's Title IV eligibility.
Regarding the Department's second finding, MJI claims, once again, that many of the students in
the Department's program review were enrolled for more than one year, and that several
graduated or are ready to graduate. (MJI's Response at 18-20.) MJI again fails to adequately
support its contention and misses the point of the Department's finding.
As a threshold matter, and as MJI repeatedly states, the Department, naturally, recognizes that
students do not necessarily have to be physically present to receive training because authorized
institutions may offer instruction through the provision of distance education. The Department
further acknowledges that U.S. citizens may be eligible for Title IV funds even while residing
overseas. Nonetheless, when evaluating a student's purported connection to the institution
through which it supposedly intends to obtain a degree, it is fully appropriate for the Department
to consider the totality of the institution's operations, and the nature of the relationship it
maintains with its students, especially when none, or almost none, of its alleged students
graduate with a degree.
Of the 30 MJI students reviewed pursuant to the program review, the Department found the same
sort of casual connection between them and the institution that was discussed immediately
above. Nothing MJI asserted in its response, as reflected in the provision of supposedly updated
transcripts, alters that conclusion.
The key consideration here is how many students graduated, or could still potentially graduate,
as opposed to how many students were able to secure Pell Grants over more than one year of
enrollment. 5 In particular , per MJI Ex. 24, only one student graduated with the degree in which
4

There are also eleven students who, as far as available Pell Grants records show, were never MJI Title JV
recipients. (ED Ex. 7.)
5
For example, MJI asserts that, "93% of the 30 students in the random sample (28/30) took online courses directly
with MJI." (MJI Response at 19.) While this is true, only six of the 28 had terms in which they purportedly took

Rabbi Kasriel Shemtov
Michigan Jewish Institute
Page6
she purportedly enrolled in MJI for the purposes of obtaining. 6 Yet, this student's transcript is
most peculiar. At the time of the program review, Student #S's transcript went through the
Winter, 2014 term, wherein she had completed 95 credit hours. (ED Ex. 8.) The "updated"
transcript also reflects that this term was the student's final term in which she was enrolled at
MJI, and she is listed with a graduation date of 6/30/2014. (MJI Ex. 24 at 37-38.) However, the
transcript obtained during the program review reflected zero transfer credits; the "updated"
transcript indicates 29 transfer credits from three different institutions/areas . Further, 12 of these
7
credits are from the same institution in which the student studied abroad. It is highly unusual
that none of the transfer credits were posted until after the Winter, 2014 term ( and after the
program review), even though the student started at MJI on 9/1/2010, the time to traditionally
award students any applicable transfer credits. The state ofMJl's student academic records casts
doubt on the legitimacy of these credits or, at a minimum, reflects adversely on the quality of
MJI's recordkeeping practices. 8
In addition , MJI claims that, "One student (Student #18) is on pace to graduate this year and two
others earned all nece ssary credits for graduation." (MJI Respon se at 19.) Once again, the
evidence MJI submits does not support its conclusions.
Student #18 has zero reported transfer hours. Per her transcript, she has earned 66 credit hours,
10
plus two most recent terms in which she has "NG" as a grade,9 for potentially 24 more credits.
The BAS General Judaic Studies degree takes 120 credit hours; thus, barring a surplu s of new
heretofore unknown transfer credits, she still has substantial work to complete before her degree
is finished, resulting in no meaningful likelihood that she will graduate this year.

In addition, it is unclear who the other two students are as MJI does not identify them , and the
transcripts it submits do not readily suggest who they may be. Arguably, however, there are two
candidates.

only MJI online courses (the remaining 22 bad terms in which online courses were taken in combination with study
abroad courses). In addition, of those six, five also had at least one term in which they were taking a combination of
online and study abroad.
6

Eleven others received the same "Certificate" discussed above, which does not provide evidence of graduation
within the context of a regular student.
7
Eleven credits are from something called ''Torah Accreditation," and another six are from some thing called "NYU
Foreign Language Proficiency Test." MJI's catalogue references the NYU Test as a source of potential transfer
credits. (ED Ex. I at 6.) The catalogue does not reference "Torah Accreditation" as a basis to receive transfer
credits.
8
9

See Part II of this letter below.
"NG" as a grade stands for "no grade" and suggests that a grade may be pending .

10

Th e student has received three ''F" grades before, so there certainly is no assurance that these classes will result in
earned credits.

Rabbi Kasriel Shemtov
Michigan Jewish Institute
Page7
Student #l3's final tenn was Winter, 2014. She had earned 87 credits and had 33 transferred
11
hours (21 from the same institution in which she was studying abroad). This equals 120 credit
hours, but she also has an "r' grade for her final class, a six credit "Internship/Externship," in
Winter, 2014, for which she also received six credits in Winter, 2013. The transcript begs the
question, "If this student really completed her studies in Winter, 2013, why is her graduation still
pending?" Such an anomaly suggests, once again, that either there are problems with the
legitimacy of her transcript, or MJI's administration of its academic programs is so woefully
12
inept that a student has been kept pending graduation for multiple years.
Similarly, Student #22's final tenn was Winter, 2014. She had earned 101 hours and had 15
transferred hours (from the same institution in which she was studying abroad). It is unclear how
101 credits can satisfy a requirement for 120 credits to graduate. In her final term, she also has
listed the same six credit "Intemship/Extemship" as Student #13 above, for which no grade was
issued, and thus, arguably remains pending. A transcript that reflects a "no grade" for more than
two years is a transcript that cannot be relied upon. 13
Accordingly, the program review data continues to reinforce the conclusions that the Department
reached regarding MJI's failure to enroll regular students.
As to the Department's third argument, MJI alleges that the absence of any meaningful number
of computer credits earned by its 524 students who were purportedly pursuing a computerrelated degree is irrelevant because these students were also expected to earn certain noncomputer credits as part of their degree. (MJI' s Response at 13-17.) Apparently, MJI wants the
Department to believe that it is sheer coincidence that nearly every single MJI student who
"enrolled" in MJI for the purpose of obtaining a "computer-related degree" from MJI decided to
wait to take any computer classes until after completing certain religious studies, and that after
completing those religious studies, or a portion of those religious studies, withdrew from MJI
without earning any computer-related credits from MJI. This claim cannot withstand even the
14
most minimal scrntiny.
Rather, what is much more likely to have occurred reflects the fact that MJl's accreditor, the
Accrediting Council for Independent Colleges and Schools (ACICS) is certified to accredit
institutions that offer programs in professional, technical, and occupational fields. It is not
certified to accredit religious studies programs. MJI therefore apparently led ACICS to believe
that some substantial component of its curriculum consisted of technical education, specifically,
11

The other 12 were purportedly from the "NYU Foreign Language Proficiency Test."

12

See Part II of this letter below.

13

Finally, MJI notes that, "15% (4/26)-- presumably MJI means 4/27-- of the students in the sample remain active in
the current semester." (MJI's Response at 20.) Accepting for these purposes that the updated transcript data is
accurate , that would still mean that with four current students, and one graduate, and two "ready" to graduate, that
23 out of 30 have withdrawn, which reflects a much less-than-stellar drop-out rate of 76%.
14

MJI makes no claim that even a single MJI student who enrolled in MJJ for the purpose of obtaining a computerrelated degree from MJI graduated from MJI with such a degree.

Rabbi Kasriel Shemtov
Michigan Jewish Institute
Page 8
computer and business degree programs, to which the religious studies were ancillary. Even
though MJI had virtually no classes in these technical areas, and virtually no students enrolled in
MJI's online classes in anything other than religious studies, MJI masked this fact by reporting to
ACICS that it had substantial numbers of students enrolled in computer and business programs.
What is abundantly clear is that these students were not regular students, enrolled in MJI for
purposes of receiving a computer-related degree from MJI. They were "religious studies"
students, enrolled by MJI for purposes of obtaining Pell Grant funds.
Regarding the Department's fourth finding, MJI claims that the Department's reference to
students' Linkedln pages, and their absence to any reference to MJI, does not "establish" the
students' intent regarding their enrollment in MJI. (MJI's Response at 17-18.) The Linkedln
pages, however, were offered merely as one more piece of illustrative evidence consistent with
the Department's conclusion that these students did not enroll in MJI for the purpose of
obtaining an MJI degree.
Instead, the Linkedln pages showed that these students enrolled as undergraduate s in Israeli
universities, received undergraduate degrees from these universities , and attended them during
the same years in which MJI claims they were MJI undergraduate students. While MJI claims
that these students were enrolled in an undergraduate program at MJI and in a "study abroad"
program in Israel, the evidence instead suggests that they were enrolled in an undergraduate
program in an Israeli university or college using MJI to obtain Pell Grant funds for use at an
ineligible institution. The fact that these students actually graduated from an Israeli institution
and apparently "dropped out" ofMJI after Pell Grant funds were exhausted shows that, in fact,
these students were not regularly enrolled students at MJI, but were actually enrolled in an Israeli
institution. 15 MJI's respon se that one of the 28 students mentions MJI in a document that can be
downloaded from his Linkedln page does not change the Department's conclusion, or the
inference the Department draws from the other instances.
Finally, MJI takes issue with the U.S. resident students with whom the Department spoke who
MJI identified as computer degree students , claiming, apparently, that most of these students
were instead enrolled in the Judaic Studies program , and have simply forgotten details about
their program of study given the passage of time. (MJl's Response at 20-27.) MJI's argument is
nonresponsive to the Department's evidence. In particular, MJI offers nothing whatsoever to
suggest that a single one of these students was really emolled in a computer degree program as
his or her MJI transcript states. Instead, the Department summarized the testimony of these six
students who all stated that they never intended to enroll in any such degree program, and, in
fact, received no computer credits. All of them were falsely represented, repeatedly, over the
course of several years, to ACICS as computer degree students. 16
15

MJI effectively acknowledges this fact in its Ex. 9, where it omits any informat ion relating to 236 out of the 247
Israeli MJJ students who were enrolled at two Israeli degree-granting universities or colleges (Ono and Jerusalem
College of Technology), and omits the transcripts for 241 out of the 247 in its Ex. 8. In marked contrast, e.g., MJI's
Ex. 9 contains information about 33 out of the 37 students listed by the Department who were enrolled at Kol Torah,
a rabbinical yeshiva.
16
Separately, MJI suggested that the Department should not consider the witness interviews conducted by a Special
Agent of the Department's Office of Inspector General because the Agent did not take formal declarations from the

Rabbi Kasriel Shemtov
Michigan Jewish Institute
Page9

The exhibits that MJI provides for these students fail to provide any rebuttal evidence. MJI
either omits the application entirely where the student would have made a degree election (Exs.
27, 28, 31), or provides the application showing the student made no election (Ex. 32), or
provides the application showing that the student actually selected Judaic Studies. (Exs. 29, 30).
MJI offers nothing to establish that the degree referenced on the student's transcript was
anything other than a computer-related degree. MJI's failure to contest the Department's claim
renders its response of no avail.
Il. MJI Failed to Exercise Adequate Standards of Administrative Capability
Relying upon MJI's own email communications, the Department found that MJI lacked the
requisite administrative capability given, essentially, a party admission that the institution
possessed "thousands" of inconsistent records . In addition, the Department corroborated this
concession with evidence of 87 MJI students who possessed multiple, inconsistent, transcripts in
their files.
MJI offers no meaningful response to this allegation. Rather it simply asserts, without a scintilla
of evidence, that the claims of wholesale recordkeeping deficiencies made by Moshe Klein, who,
MJI states was employed "to handle general management of the school," could not be supported
by Mr. Klein when he met with MJI representatives on February 29, 2013. 17 (MJI's Brief at 27.)
If such a meeting really did take place, and if, as a result, MJI really decided that Mr. Klein's
claims were fictitious, reflecting either incompetence or perhaps maliciousness, and that its
records were completely devoid of the "thousands" of inconsistent records that made MJI's
operations effectively unauditable, it is unfathomable that there would be no records from that
meeting to present.
This is especially true since Mr. Klein's representations served to create a special "Data
Integrity" team operating something called the "Long Jump" project, which was intended to
resolve vast categories of irregular records. Once again, if Mr. Klein's statements had been
found to be made out of whole cloth, surely there would be additional records stating that this
project was no longer necessary, and that any efforts by the team would have generated reports
stating that there was ''no there, there."
In addition, MJI dismisses the Department's presentation of 87 student files with multiple,
inconsistent, transcripts as evidencing an error rate of less than 1% given MJl's supposed
enrollment of over 7,000 students during this time. (MJI's Response at 28.) To the contrary,
these exemplars go to the core of MJI's administrative capability. Surely, no document is more
essential to an institution's students, and the receipt and disbursement of Title IV funds, than the

interviewees. (MJI's Supp lemental Response at 1-2.) T he Department disagrees. For purposes of this
recertification denial, the Department is confident that the Agent correctly reported the one salient fact at issue, i.e.,
that none of these six students enrolled in MJI for the purpose of obtaining a computer-related degree, contrary to
the representation that MJI made on the student's MJI transcript. In fact, MJI makes no claim contradicting its
student transcripts, rendering its objection moot.
17
No such date actually exists .

Rabbi Kasriel Shemtov
Michigan Jewish Institute
Page 10
student transcript, and there is no conclusion that can be reached when an institution maintains
multiple transcripts for its students other than that it lacks the administrative capability required
to serve as the Department's fiduciary. 18
MJI's attempt to dismiss this finding as inconsequential only serves to heighten the importance
of denying its recertification application. 19 The possession of administrative capability caru1otbe
aspirational. It is an absolute condition precedent to Title IV eligibility, and MJI failed this
mandatory requirement. 20

III.MJI Provided False Information to Its Accrediting Agency
In reviewing the Campus Accountability Report (CAR) data that MJI presented to its accreditor,
ACICS, the Department found that for all 248 of its Pell Grant recipients for 2009-2010, MJI
falsely advised ACICS that every student was enrolled for at least one more year than they
actually were, because, in fact, each student was enrolled for only so long as necessary to secure
receipt of a Pell Grant. MJI, in its response, first argues that such a misrepresentation, if true,
would not have materially changed its retention rate, so it did not constitute an actionable
"substantial misrepresentation" because a substantial misrepresentation requires detrimental
reliance by the recipient. Specifically, MJI claims that even with proper reporting of the status of
these 248 students it still would have passed ACICS' required retention rate threshold, and thus,
ACICS could not have relied upon the misrepresentation to its detriment. (MJI's Response at
29-30.) Second, MJI asserts, again without a scintilla of evidence in support, that MJI's
Controller reported these 248 students were enrolled for a bonus year because MJI purportedly
considered a student who "did not register for classes in the current term and who failed to attend
any courses for 12 consecutive months" as having matriculated, and not having withdrawn until
the end of that 12 month period. (MIT's Response at 30-31).
As to MJI's first argument, it is foolhardy to assume that ACICS cares only about the
truthfulness of the information it receives if it has a direct effect on a matrix it otherwise
evaluates. The Department is confident that ACICS, like any accrediting agency, believes it is
entitled to truthful information in all instances, and that if it receives a report that misrepre sents
18

MJI makes the bold claim that the proper conclusion to be reached from these discrepant records maintained in
student files is that the " Departm ent [was] confus[ed] between one document which represents the student's actual
transcript, and anoth er document which does not." (MJl's Response at 29 .) Nonsense. A student does not have two
documen ts in his or her file, identica l in every respect, except for the degree sought through a program of
instruction, at an institution that is operating with "the highest degree of care and diligence" necessary to serve "in
the nature of a fiduciary." See34 C.F.R. § 688.82.
19

MJI further notes that ACICS' report from its 2013 visit contained no adverse citations based upon the quality of
MJI's student records. (MJl's Response at 27-28; Ex.4 1.) Even if true, such a conclusion presumably reflect s
nothing more than the fact that the visit occurred after MJI committed vast resources to expunging its files of
massive amounts of conflicting documentation.
20

MJI's Ex. 9 also contains a number of duplicate entries, with the duplicat e infonnation hjghlighted. Remarkably,
there are ten names on MJl's Exhibit 9 that have duplicate listings where the duplicat es contain inconsistent
infonnat ion concerning degree sought , credits earned, enro llment years, and active stat us. (See ED Ex. 9.) This
provides yet more evidence of MJI's unreliable record keeping and administrative incap ability.

Rabbi Kasriel Shemtov
Michigan Jewish Institute
Page I I
the enrollment status of every single Pell Grant recipient in a particular award year, it will have
relied upon that information, to its detriment , in its overall evaluation of the competency and
integrity of the institution.
As to the second, the claim makes little sense. Although offered as reflecting MJI policy, MJI
fails to produce that policy. And although further offered as consistent with the Controller's
"understanding" of that policy, MJI produces nothing to support that characterization. As with
its response to the administrative incapability charge, MJI offers a wholly implausible depiction
of events with a dearth of evidentiary support. Such a "defense" will not cause the Department
to reconsider its findings.
MJI has therefore not provided the Department with a basis to rescind its decision to deny the
school's recertification application. Consequently, the denial is now a final agency decision and
MJI is therefore ineligible to participate in the Title IV programs. The Department's
Chicago/Denver School Participation Division will contact MJI regarding the proper procedures
for closing out its Title IV, HEA participation.
In the event that MJI submits an application to participate in the Title IV, HEA programs in the
future, that application must address the deficiencies noted in this letter.
If you have any questions, please contact Kerry O'Brien ofmy staff at (303) 844-3319.

Susan D. Crim
Director
Administrative Actions and Appeals Service Group

cc: Peter S. Leyton, Counsel for MJI, via [email protected]
Deborah Hill, Executive Assistant, Accrediting Council for Independent Colleges and
Schools, via [email protected]
Michael Beamish, Licensing Manager, Department of Licensing and Regulatory Affairs, via
[email protected]
Department of Defense, via osd.pentagon.ousd-p-r.rmbx. [email protected]
Department of Veteran Affairs, via [email protected]
Consumer Financial Protection Bureau, via CFPB ENF [email protected]

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