What happened to @#$%&* College
@#$%&* College started as a nice little Canadian career college.
According to Stats Canada in 2006, 87% of 25- to 29-year-olds graduated from high school and both colleges and universities together graduated about 54 % of the population.
The real natural market for Canadian Private Career Colleges (PCC's), counting all the dropouts and career changers as well as those training to re-entering the job market, is 11.5 % of the population.
Canada consistently ranks in the top 8% of multicultural public education systems in the world. The USA ranks in the bottom 30% in the world scale of public education and with a college grad level of about 31%.
Some estimates that up to 38% of the USA population need PCC training to enter many of the job markets.
Many big flashy USA based education investors look at general demographics and make the mistake of thinking WOW in Canada only 1.5 % of the student population goes to PCCs - we can make a killing with a PCC up in Canada.
If you add some USA based accelerated tax benefits + perception of an untapped market you will have some investors rush or get pushed in.
When a big flashy USA mutual fund waves 10 Million in front of the smaller Canadian PCC operators and says can you spend all the money expanding as quickly as possible ? You know the PCC's will say yes without reading all the fine print.
The fine print says if you do not meet targets - we will take over - what else is not in the weaponized fine print - we will pay ourselves huge fees - we will run the school for our benefit not anyone else.
@#$%&* was operated the USA way - wild spending to obtain initial tax credits - USA sales targets not met - the takeover - huge management fees to mutual fund manager - wild cost cutting to punish @#$%&* students, staff and minority investors.
We do not have access to all the accounting but it looks like the mutual fund investors lost the initial 10 million dollar private equity investment. The mutual fund management company paid themselves huge fees to make the investment - take over the company - run the company into the ground then when it was dead with no cash or cash flow tried to sell it failed to sell at any price and finally just gave it back to the original minority investors - who by this time had over 5 years of no revenue and suffered a complete loss.
The @#$%&* had hundreds of complaints on social media by students, staff, teachers and creditors. The @#$%&* was stripped of student government tuition funding OSAP - this is a huge loss. @#$%&* was famous for having 2 SRO Career Regulators suing to stop prep classes at @#$%&* as all recent students failed and were inadequately prepared with knowledge or skills to perform in those careers.
@#$%&* was like a victim of the Russian scorched earth policy when retreating from the Nazis in WW2.
If you're counting:
-all private equity investors down about 15 million in total,
-students wasted 1,500 hours and about 25 million and
-the Ontario government lost deadbeat college loans of about 18 million.
-USA Private Mutual Management Company "earned" about 11.5 million.
In the next article we will explain what else the mutual fund management company did to make money.
The big flashy USA mutual fund has waved 10 Million to another small PCC - told them to expand - you just have to get these easy registration numbers - whoops they just took over !!!
I am sure that you can understand why the warnings should go out about this criminal organization.
Another reason the big flashy mutual fund manager operates outside of the USA is that it would attract RICO attention. The Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act or simply RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization.
There are a few smoking guns at @#$%&* to indicate some of the crimes and you guessed it there are a few smoking guns in the new victim PCC.
The police and regulators will let one tragic investment loss slide - everyone is allowed one bad situation because of inexperience, stupidity, maybe a pandemic, however, when it happens the second time and third time - everyone knows it is criminal activity by design.
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