Federal investigators have declined to charge anyone and closed a long-running criminal investigation into a Louisville for-profit college that folded amid an FBI raid.
Robert Keats, the trustee for the now-defunct Decker College, said the FBI returned 750 boxes of records to him in January and said the investigation into the school was closed without charges. Keats disclosed the status of the investigation to a federal bankruptcy judge in a filing made public Tuesday.
"I got this abrupt phone call telling me to come get the boxes," Keats told The Associated Press. "There are no indictments, no further investigation."
U.S. Attorney spokeswoman Dawn Masden confirmed that the investigation has been closed with no indictments. Keats said he didn’t know why the investigation closed with no charges. Masden would only confirm that the probe is over.
Decker College, which was partially owned and run by former Massachusetts Gov. William Weld, went out of business in September 2005 and declared bankruptcy a month later. The FBI raided the 3,700-student school, taking boxes of information, computers and records.
The investigation by the FBI and the Department of Education’s inspector general centered on violations of federal law, including conspiracy to commit fraud, wire fraud, financial aid fraud and giving false statements to the federal government.
Jeff Woodcox, one of the school’s one-time proprietors, said he’s still angry about the probe, and that the school’s owners didn’t misuse federal money while the school was open.
"I’m not surprised they closed the investigation," Woodcox told The Associated Press. "I’m just surprised at how long they took to close it."
The school’s bankruptcy case is entering its fourth year, with more than 600 creditors seeking more than $57 million, including the U.S. Department of Education’s claim for $32 million in federal funds. As of Tuesday, Keats said he’s collected $257,000 from the sale of various assets and used $173,000 to pay some creditors.
The school, which had about 500 employees, operated campuses in Louisville, Atlanta, Indianapolis and Jacksonville, Fla., offering in-school and online classes in carpentry, electrical and heating and air conditioning repair.
Keats said the federal investigation into Decker’s collapse tied his hands as far as finding and collecting assets that could be cashed or sold to repay former students and the school’s creditors. State and federal investigators put some things off limits, Keats said.
"Nobody would say anything," Keats said. "Nobody knew if they were going to get indicted."
With the investigation closed, Keats said, he may be able to collect some money and partially repay students who were enrolled at the time the school collapsed.
"I hope to clean up and bring some restitution for those kiddoes who lost tuition money and teachers, too," Keats said.
The bankruptcy also spawned a related lawsuit in Bardstown, Ky. Wilson and Muir Bank sued Weld, who took over the school in 2005, seeking to recover a $3 million personal loan Weld guaranteed to keep the school running. That lawsuit was still pending. (CBS4.com)