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Attorney General William Tong


Attorney General Tong Expands Complaint Against Stone Academy

Bierbaum and Scheinberg Reaped Millions, Luxury Cars, Mansion While Stone Students Denied Promised Education

(Hartford, CT) – Attorney General William Tong today expanded the state’s case against Stone Academy, filing an amended complaint detailing millions of dollars siphoned from the for-profit nursing school by Stone’s owners while students were deprived of a promised education.

Stone is a for-profit business owned by Joseph Bierbaum and Creative Career Trust, established by Mark Scheinberg for his own benefit. The amended complaint alleges how both Bierbaum and Scheinberg earned vast sums from unfair and deceptive conduct.

“Our amended complaint shows how Stone’s owners systematically siphoned millions of dollars from Stone, leaving the school financially incapable of living up to its promises,” said Attorney General Tong. “Stone Academy promised an education that would position students to become Licensed Practical Nurses in less than two years, with hands-on training from industry leaders. The evidence shows otherwise. While Stone students struggled in unheated classrooms without textbooks, experienced teachers, or promised clinical experiences, Stone’s own financial records show how Stone’s owners hoarded millions of dollars for luxury cars, mansions, and their other businesses. The more we investigate, the more greed and lies we uncover. This is a textbook case of consumer deception. The evidence is growing stronger by the day. We will hold Stone and its owners accountable, and we will get justice for Stone’s students.”

Stone Revenues Swell While Nursing Exam Pass Rates Plummet

The amended complaint shows how Stone enrollment and revenues surged at the height of the COVID-19 pandemic, enriching Stone’s owners at the expense of students.

Stone’s revenues swelled from approximately $660,000 per year in 2019 to well over $3 million per year in both 2020 and 2021, bolstered by increased student loan revenue, increased student fees, and federal pandemic aid. But Stone students never benefited from this infusion of revenue, the amended complaint alleges. While Stone’s nursing exam pass rates faltered, Stone’s owners paid themselves nearly $5 million in distributions for 2020 and 2021 alone. Stone’s income from student fees increased from $1.8 million in 2018 to over $3 million in 2021. Yet, in many instances, students did not receive the books they paid for, struggling to learn from photocopied handouts instead.

As reflected in Stone’s audited financial statements obtained by the Office of the Attorney General, these outsized distributions started during the pandemic, after Stone received over $18 million in tuition payments (including $16.3 million in federal loan or grant revenue), and nearly $1.8 million in federal Payroll Protection Plan funds meant to support the salaries of instructors and staff.

Stone Owners Get Rich While Students Struggle

During this time, Bierbaum bought a $1.4 million, 9,000 square foot mansion in Rocky Hill with a pool, tennis court, four-car garage, and a koi pond. Stone paid over $100,000 per year for three luxury vehicles—two Teslas and an Audi—driven by Stone insiders.

In addition to outsized member distributions, Stone’s owners used Stone as a bank for their other businesses. As of December 31, 2021, Stone had loaned over $2.5 million to a network of affiliated family businesses, including Paier College of Art. Stone’s assets were used to secure at least $3.3 million in mortgages by two affiliated entities, including Paier, its landlords Oyster River and Olmstead Realty, and Sound Education LLC. Financial records show Stone loaned $439,041 to Sound Education for some of the down payment Sound used to purchase property owned by University of Bridgeport, where Scheinberg was a trustee. The property was subsequently leased to Paier, run by defendant Bierbaum, for its use.

While Stone’s owners got rich, Stone utterly failed to provide the education and training it promised, rendering many of its graduates ineligible to sit for the NCLEX licensing exam and obtain licensure. Many of Stone’s faculty were not qualified to teach practical nursing students. Stone provided only a fraction of the 750 hours of clinical experience was required to provide, let alone the 860 it promised. Stone students could not graduate on time due to a backlog of over 1,000 students waiting for clinical hours. Stone’s so-called clinical experiences were often invalid, and in some cases merely self-serving, including directing students to perform COVID-19 temperature screenings for Stone and Paier College. At Bierbaum’s direction, Stone even stopped taking attendance to track its students’ progress.

Connecticut’s Initial Complaint

Attorney General Tong first sued Stone Academy, Paier College of Art and Bierbaum in July, alleging numerous violations of the Connecticut Unfair Trade Practices Act following the abrupt closure of the for-profit nursing school. Read more about that complaint here.

Attorney General Tong simultaneously asked the court to attach multiple millions of dollars of Stone’s and Bierbaum’s assets during the pendency of this litigation, including Bierbaum’s Rocky Hill mansion. This would prevent the defendants from offloading or shifting resources to evade accountability. The hearing on that prejudgment remedy request is scheduled to begin on November 1.

Attorney General Tong first launched an investigation into the shuttered nursing school on February 23, after Stone abruptly closed its doors leaving students’ education plans in limbo. Evidence compiled through numerous depositions, interviews and review of thousands of documents is irrefutable. Stone, its owner Joseph Bierbaum, and Paier College of Art, also owned by Bierbaum, engaged in unfair conduct and willfully deceived its students in clear violation of Connecticut law.

For repeated, willful acts of deception and unfairness in violation of the Connecticut Unfair Trade Practices Act, the Office of the Attorney General is seeking civil penalties of up to $5,000 per violation—a sum likely totaling many millions of dollars, in addition to the disgorgement of all revenues, profits and gains achieved through such acts and practices. The complaint also seeks restitution for the victims of Stone’s conduct—students.

The complaint further requests that the court appoint a receiver for Stone Academy to marshal its assets.

Assistant Attorneys General Joseph Gasser and Kate Hsu Hagmann-Borenstein, Addison Keilty, Legal Investigator Caylee Ribeiro, Paralegal Specialist Megan Kane and Deputy Associate Attorney General Michael Wertheimer, Chief of the Consumer Protection Section, are assisting the Attorney General in this matter.
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