Home > News > July 15, 2007 - Capella University Accused of Fraud In Federal Lawsuit!

Capella University Accused of Fraud In Federal Lawsuit!

Capella University has just been accused of fraud and intentionally deceiving their insurance company! That's right, in their response to Capella University's malicious and frivolous lawsuit against them, Executive Risk Specialty Insurance Company (ERSIC), (which Capella is suing for refusing to pay for their vicious actions against a student who is also suing Capella), ERSIC has just stated to the United States District court that,

"Plaintiff [Capella University], with intent to deceive or defraud ERSIC, made various misrepresentations in its written applications for coverage. These misrepresentations included, but were not limited to . . . Plaintiff failed, among other things, to disclose information regarding prior claims and administrative proceedings involving Plaintiff and [the student who is now suing Capella University], failed to disclose facts and/or circumstances which Plaintiff had reason to suppose might give rise to a future claim that would fall within the scope of the proposed coverage, and failed to disclose any actual or alleged errors, omissions, offenses, or circumstances which may reasonably have been expected to result in a claim being made against Plaintiff. Pursuant to the terms of the Policy, these misrepresentations independently and collectively are considered as incorporated in and constitute part of the Policy."

Not surprisingly, Capella's lying shyster, Priscilla McNulty is involved in this lawsuit too. Of course, we believe that ERSIC is absolutely correct in their claim that Capella University has intentionally acted to deceive and defraud them. For example, Capella University and their "Sleaze Team 2" (consisting of Gerald H Bren and Thomas M Stieber) from the "law firm" of Foley Mansfield) told (we believe intentionally lied) to the court that the student who is also suing Capella had filed a complaint

". . .with the U.S. Department of Education (“DOE”), which was investigated and dismissed four months before the Executive Risk policy was issued."

As to be expected, that is a lie - the student had filed SEVERAL complaints with different law enforcement agencies within the United States Department of Education (USDE) and ALL of them were still pending (as the student had rightfully appealed the incompetent "investigation" by the morons within the USDE, Office for Civil Rights [OCR]). In fact, the OCR complaint wasn't administratively closed until August 2005 (shyster Priscilla McNulty lied and or intentionally made up her own "facts" about that matter in a declaration she made to another Federal Court on January 23, 2006). The OCR matter was, indeed, administratively closed at the end of August 2005 after someone (we believe it was Capella's head pompom girl and employee, Shawn Ambrose) contacted OCR.

What Capella University and their Sleaze Team 2 (from Foley Mansfield) also failed to tell the court (i.e., in an attempt to intentionally deceive and commit fraud) is that there is another law enforcement case that had been opened, nearly a year before Capella opened their policy WITH ERSIC. Not only that but, more than THREE YEARS later, that case is still pending (as of July 15, 2007)! Specially, Capella University has intentionally refused to turn over education records to the student as required under a Federal Law - the Family Educational Rights and Privacy Act (FERPA). Capella is still under investigation for that FACT by the USDE, Family Policy Compliance Office. As we've previously noted, both of Capella's shysters - Greg Thom and Priscilla McNulty have actively engaged in lying about the FERPA matter. In fact, shyster Greg Thom remains the prime SUBJECT of that FERPA investigation.

In addition to the above FACTS, ERSIC has also just told the court that:

"Coverage for [the student who is suing Capella] claims against Plaintiff [ERSIC] is barred by the known-loss doctrine."

The "known-loss doctrine" essentially states that an insurer is not responsible for something that the insured knew about prior to obtaining their policy. In this case, Capella University didn't obtain coverage from ERSIC until sometime around June 2005 and yet they were aware they were going to be sued at least as early as July 15, 2004. ERSIC has stated that:

"Plaintiff [Capella University] failed, among other things, to disclose information regarding prior claims and administrative proceedings involving Plaintiff and [the student who is now suing Capella University], failed to disclose facts and/or circumstances which Plaintiff had reason to suppose might give rise to a future claim that would fall within the scope of the proposed coverage, and failed to disclose any actual or alleged errors, omissions, offenses, or circumstances which may reasonably have been expected to result in a claim being made against Plaintiff."

Not only is ERSIC absolutely correct but it is a FACT that Capella and their shysters KNEW that they were going to be sued almost a full year before they opened their policy with ERSIC! Specific examples of this FACT include:

• July 15, 2004 - One of Capella's thugs, Tamara Kuchar told OCR and Capella's Kangaroo Court that she had "called the Complainant [the student who is now suing Capella University] at his home telephone number and asked him whether he wanted to pursue the directed study option. The Complainant told her that he was not interested in anything less than full access to the course and added, "Put it in writing. I'm in the process of suing Capella University." The Interviewee explained that she did not have time to mention the full tuition refund because the Complainant ended the telephone call."
• July 19, 2004 - One of Capella's moronic "deans", Kurt Linberg (the one who can't spell), told Karen Viechnicki (Capella's unethical lying provost) that "everything that we communicate to this learner [the student who is suing Capella] needs to go through Greg [Thom]."
• July 26, 2004 - Shyster Greg Thom tells Capella's Kangaroo Court that, "Due to pending legal issues, Capella's general counsel [shyster Greg Thom] has advised that this tuition refund be processed ASAP."

It cannot be questioned the Capella University and their shysters knew , nearly a FULL YEAR before they opened their ERSIC policy, that they were going to be sued! Obviously, lying shysters Greg Thom and Priscilla McNulty, along with their "sleaze team 2", consisting of Gerald H Bren and Thomas M Stieber, from the "law firm" of Foley Mansfield have intentionally kept these FACTS from the court! .

Go get 'em ERSIC! We hope that the Federal Court will throw the book at Capella and their shyster twins (Thom and McNulty) for their ongoing acts of blatant deceit and ongoing fraud.