§ 5003 — Disciplinary actions, hearings and penalties

§ 5003. Disciplinary actions, hearings and penalties. 1. Disciplinary\naction. a. The commissioner for good cause, after affording a school an\nopportunity for a hearing, may take disciplinary action as hereinafter\nprovided against any school authorized to operate under this article.\n b. Good cause shall include, but not be limited to, any of the\nfollowing:\n (1) fraudulent statements or representations to the department, the\npublic or any student in connection with any activity of the school;\n (2) violation of any provision of this article or regulation of the\ncommissioner;\n (3) conviction or a plea of no contest on the part of any owner,\noperator, director or teacher:\n (A) of any of the following felonies defined in the penal law: bribery\ninvolving public servants; commercial bribery; perjury in the second\ndegree; rewarding official misconduct; larceny, in connection with the\nprovision of services or involving the theft of governmental funds;\noffering a false instrument for filing, falsifying business records;\ntampering with public records; criminal usury; scheme to defraud; or\ndefrauding the government; or\n (B) in any other jurisdiction of an offense which is substantially\nsimilar to any of the felonies defined in clause (A) of this\nsubparagraph and for which a sentence to a term of imprisonment in\nexcess of one year was authorized and is authorized in this state\nregardless of whether such sentence was imposed; or\n (4) incompetence of any owner or operator to operate a school.\n c. (1) Any person who believes he or she has been aggrieved by a\nviolation of this section, except a person aggrieved by the actions or\nomissions of a candidate school, shall have the right to file a written\ncomplaint within: (A) two years of the alleged violation; or (B) one\nyear of receiving notification from the higher education services\ncorporation or any other guarantee agency that the student has defaulted\non a student loan payment; provided, however, that no complaint may be\nfiled after three years from the date of the alleged violation. The\ncommissioner shall maintain a written record of each complaint that is\nmade. The commissioner shall also send to the complainant a form\nacknowledging the complaint and requesting further information if\nnecessary and shall advise the director of the school that a complaint\nhas been made and, where appropriate the nature of the complaint.\n (2) The commissioner shall within twenty days of receipt of such\nwritten complaint commence an investigation of the alleged violation and\nshall within ninety days of the receipt of such written complaint, issue\na written finding. The commissioner shall furnish such findings to the\nperson who filed the complaint and to the chief operating officer of the\nschool cited in the complaint. If the commissioner finds that there has\nbeen a violation of this section, the commissioner shall take\nappropriate action.\n (3) The commissioner may initiate an investigation without a\ncomplaint.\n (4) Notwithstanding the provisions of subparagraph one of this\nparagraph or any other provision of this article to the contrary, a\nstudent at a candidate school shall have the right to file a written\ncomplaint from an alleged violation of the provisions of clause three of\nsubparagraph (iv) of paragraph b of subdivision four of section five\nthousand one of this article that require disclosure of candidacy status\nand its implications and a signed attestation by the student, within two\nyears of such violation. Upon a finding that such a violation has\noccurred, the candidate school shall be required to provide a refund of\nall monies and fees received from or on behalf of the student.\nAppropriate action shall also be taken against the candidate school\npursuant to the provisions of subparagraph (iv) of paragraph b of\nsubdivision four of section five thousand one of this article.\n (5) No owner, operator, licensed personnel, or agent thereof of a\nlicensed private career school shall discriminate, intimidate, or\nretaliate against any person who files a written complaint pursuant to\nthis paragraph.\n 2. Hearing procedures. a. Upon a finding that there is good cause to\nbelieve that a candidate school under the provisions of subparagraph\n(iv) of paragraph b of subdivision four of section five thousand one of\nthis article, or a licensed school, or an officer, agent, employee,\npartner or teacher, has committed a violation of this article, the\ncommissioner shall initiate proceedings by serving a notice of hearing\nupon each and every such party subject to the administrative action. The\nschool or such party shall be given reasonable notice of hearing,\nincluding the time, place, and nature of the hearing and a statement\nsufficiently particular to give notice of the transactions or\noccurrences intended to be proved, the material elements of each cause\nof action and the civil penalties and/or administrative sanctions\nsought.\n b. Opportunity shall be afforded to the party to respond and present\nevidence and argument on the issues involved in the hearing including\nthe right of cross examination. In a hearing, the school or such party\nshall be accorded the right to have its representative appear in person\nor by or with counsel or other representative. Disposition may be made\nin any hearing by stipulation, agreed settlement, consent order, default\nor other informal method.\n c. (1) The commissioner shall designate an impartial hearing officer\nto conduct the hearing, who shall be empowered to:\n (A) administer oaths and affirmations; and\n (B) regulate the course of the hearings, set the time and place for\ncontinued hearings, and fix the time for filing of briefs and other\ndocuments; and\n (C) direct the school or such party to appear and confer to consider\nthe simplification of the issues by consent; and\n (D) grant a request for an adjournment of the hearing only upon good\ncause shown.\n (2) The strict legal rules of evidence shall not apply, but the\ndecision shall be supported by substantial evidence in the record.\n 3. Decision after hearing. The hearing officer shall make written\nfindings of fact and conclusions of law, and shall also recommend in\nwriting to the commissioner a final decision including penalties. The\nhearing officer shall mail a copy of his or her findings of fact,\nconclusions of law and recommended penalty to the party and his or her\nattorney, or representative. The commissioner shall make the final\ndecision, which shall be based exclusively on evidence and other\nmaterials introduced at the hearing. If it is determined that a party\nhas committed a violation, the commissioner shall issue a final order\nand shall impose penalties in accordance with this section. The\ncommissioner shall send by certified mail, return receipt requested, a\ncopy of the final order to the party and his or her attorney, or\nrepresentative. The commissioner shall, at the request of the school or\nsuch party, furnish a copy of the transcript or any part thereof upon\npayment of the cost thereof.\n 4. Judicial review. Any order imposed under this section shall be\nsubject to judicial review under article seventy-eight of the civil\npractice law and rules, but no such determination shall be stayed or\nenjoined except upon application to the court after notice to the\ncommissioner.\n 5. Enforcement proceedings. The attorney general, in his or her own\ncapacity, or at the request of the commissioner, may bring an\nappropriate action or proceeding in any court of competent jurisdiction\nto recover a fine or otherwise enforce any provision of this article.\n 6. Civil penalties and administrative sanctions. a. A hearing officer\nmay recommend, and the commissioner may impose, a civil penalty not to\nexceed three thousand five hundred dollars for any violation of this\narticle, including a school's failure to offer a course or program as\napproved by the commissioner. In the case of a second or further\nviolation committed within five years of the previous violation, the\nliability shall be a civil penalty not to exceed seven thousand five\nhundred dollars for each such violation.\n b. Notwithstanding the provisions of paragraph a of this subdivision,\na hearing officer may recommend, and the commissioner may impose a civil\npenalty not to exceed seventy-five thousand dollars or double the\ndocumented amount from which the school benefited, whichever is greater,\nfor any of the following violations: (1) operation of a school without a\nlicense in violation of section five thousand one of this article; (2)\noperation of a school knowing that the school's license has been\nsuspended or revoked; (3) use of false, misleading, deceptive or\nfraudulent advertising; (4) employment of recruiters on the basis of a\ncommission, bonus or quota, except as authorized by the commissioner;\n(5) directing or authorizing recruiters to offer guarantees of jobs upon\ncompletion of a course; (6) failure to make a tuition refund when such\nfailure is part of a pattern of misconduct; (7) the offering of a course\nor program that has not been approved by the commissioner; (8) admitting\nstudents, who subsequently drop out, who were admitted in violation of\nthe admission standards established by the commissioner, where such\nadmissions constitute a pattern of misconduct and where the drop out\nresulted at least in part from such violation; (9) failure to provide\nthe notice of discontinuance and the plan required by subdivision seven\nof section five thousand one of this article; or (10) violation of any\nother provision of this article, or any rule or regulation promulgated\npursuant thereto, when such violation constitutes part of a pattern of\nmisconduct which significantly impairs the educational quality of the\nprogram or programs being offered by the school. For each enumerated\noffense, a second or further violation committed within five years,\nshall be subject to a civil penalty not to exceed one and one-half times\nthe amount of the previous violation for each such violation.\n c. In addition to the penalties authorized in paragraphs a and b of\nthis subdivision, a hearing officer may recommend and the commissioner\nmay impose any of the following administrative sanctions: (1) a cease\nand desist order; (2) a mandatory direction; (3) a suspension or\nrevocation of a license; (4) a probation order; or (5) an order of\nrestitution.\n d. Penalty factors. In the recommendation of any penalty, a hearing\nofficer shall, at a minimum, give due consideration, where applicable,\nto the good faith of the violator and the gravity of the violation.\n e. The commissioner may suspend a license upon the failure of a school\nto pay any fee, fine, penalty, settlement or assessment as required by\nthis article unless such failure is determined by the commissioner to be\nfor good cause.\n f. All civil penalties, fines and settlements received after April\nfirst, nineteen hundred ninety shall accrue to the credit of the tuition\nreimbursement account established pursuant to section ninety-seven-hh of\nthe state finance law.\n 7. Criminal penalties. In addition to any other penalties elsewhere\nprescribed:\n a. Any person who knowingly violates any of the provisions of this\narticle shall be guilty of a class B misdemeanor punishable in\naccordance with the penal law. If the conviction is for a second offense\ncommitted within five years of the first conviction under this\nparagraph, such person shall be guilty of a class A misdemeanor\npunishable in accordance with the penal law.\n b. Any person who knowingly (1) falsifies or destroys school or other\nbusiness records relating to the operation of the school with intent to\ndefraud; (2) fails to make a tuition refund as required by section five\nthousand two of this article with the intent to defraud more than one\nperson; or (3) operates a school without a valid license required by\nsection five thousand one of this article shall be guilty of a class A\nmisdemeanor punishable in accordance with the penal law.\n c. Any person who, having been convicted within the past five years of\nfailing to make a tuition refund in violation of subparagraph two of\nparagraph b of this subdivision, knowingly and intentionally engages in\na scheme constituting a systematic ongoing course of conduct involving\nthe wrongful withholding of refunds in violation of section five\nthousand two of this article with the intent to defraud ten or more\npersons, and so withholds tuition refunds in excess of one thousand\ndollars, shall be guilty of a class E felony punishable in accordance\nwith the penal law.\n d. Upon a determination that there exist reasonable grounds to believe\nthat a violation of this article has been committed, or that any other\ncrime has been committed in connection with the operation of a school\nrequired to be licensed pursuant to this article, the commissioner shall\nrefer such determination, and the information upon which it is based, to\nthe attorney general or to the appropriate district attorney. The\nattorney general or a district attorney may bring an action on his or\nher own initiative.\n 8. Private right of action. A student injured by a violation of this\narticle may bring an action against the owner or operator of a licensed\nprivate career school for actual damages or one hundred dollars,\nwhichever is greater. A court may, in its discretion, award reasonable\nattorney's fees to a prevailing plaintiff. No owner, operator, licensed\npersonnel, or agent thereof of a licensed private career school shall\ndiscriminate, intimidate, or retaliate against any student who brings a\nprivate right of action against the owner or operator of a licensed\nprivate career school pursuant to this subdivision.\n