2006 New York Code - Disciplinary Actions, Hearings And Penalties.

 
    § 5003. Disciplinary actions, hearings and penalties.  1. Disciplinary
  action.  a. The commissioner for good cause, after affording a school an
  opportunity for a hearing, may take disciplinary action  as  hereinafter
  provided against any school authorized to operate under this article.
    b.  Good  cause  shall  include,  but  not  be  limited to, any of the
  following:
    (1) fraudulent statements or representations to  the  department,  the
  public or any student in connection with any activity of the school;
    (2)  violation  of  any provision of this article or regulation of the
  commissioner;
    (3) conviction or a plea of no contest  on  the  part  of  any  owner,
  operator, director or teacher:
    (A) of any of the following felonies defined in the penal law: bribery
  involving  public  servants;  commercial  bribery; perjury in the second
  degree; rewarding official misconduct; larceny, in connection  with  the
  provision  of  services  or  involving  the theft of governmental funds;
  offering a false instrument for  filing,  falsifying  business  records;
  tampering  with  public  records;  criminal usury; scheme to defraud; or
  defrauding the government; or
    (B) in any other jurisdiction of an  offense  which  is  substantially
  similar   to  any  of  the  felonies  defined  in  clause  (A)  of  this
  subparagraph and for which a sentence  to  a  term  of  imprisonment  in
  excess  of  one  year  was  authorized  and  is authorized in this state
  regardless of whether such sentence was imposed; or
    (4) incompetence of any owner or operator to operate a school.
    c. (1) Any person who believes he or  she  has  been  aggrieved  by  a
  violation  of  this  section  shall  have  the  right  to file a written
  complaint within: (A) two years of the alleged  violation;  or  (B)  one
  year  of  receiving  notification  from  the  higher  education services
  corporation or any other guarantee agency that the student has defaulted
  on a student loan payment; provided, however, that no complaint  may  be
  filed  after  three  years  from  the date of the alleged violation. The
  commissioner shall maintain a written record of each complaint  that  is
  made.  The  commissioner  shall  also  send  to  the  complainant a form
  acknowledging  the  complaint  and  requesting  further  information  if
  necessary  and  shall advise the director of the school that a complaint
  has been made and, where appropriate the nature of the complaint.
    (2) The commissioner shall within  twenty  days  of  receipt  of  such
  written complaint commence an investigation of the alleged violation and
  shall within ninety days of the receipt of such written complaint, issue
  a  written  finding. The commissioner shall furnish such findings to the
  person who filed the complaint and to the chief operating officer of the
  school cited in the complaint. If the commissioner finds that there  has
  been   a   violation  of  this  section,  the  commissioner  shall  take
  appropriate action.
    (3)  The  commissioner  may  initiate  an  investigation   without   a
  complaint.
    d.   During   the  initial  two  year  licensing  period,  before  the
  commissioner  may  bring  enforcement  proceedings  against  a  licensed
  entity, the following shall be taken into consideration:
    (1)   whether  such  entity  has  demonstrated  that  the  regulations
  promulgated under this chapter are unduly burdensome given the nature of
  the instruction provided by such entity;
    (2)  whether  such  entity   has   identified   potential   areas   of
  noncompliance  with  this  chapter  and any such regulation within sixty
  days of the licensing or registration date of such entity;
    (3) whether such entity has engaged in good faith discussions with the
  department to resolve  such  violations  and/or  promulgate  regulations
  which further the goals of this chapter.
    2.  Hearing  procedures. a. Upon a finding that there is good cause to
  believe that a school,  or  an  officer,  agent,  employee,  partner  or
  teacher,  has  committed  a  violation of this article, the commissioner
  shall initiate proceedings by serving a notice of hearing upon each  and
  every  such  party  subject  to the administrative action. The school or
  such party shall be given reasonable notice of  hearing,  including  the
  time,  place,  and  nature  of  the hearing and a statement sufficiently
  particular to give notice of the transactions or occurrences intended to
  be proved, the material elements of each cause of action and  the  civil
  penalties and/or administrative sanctions sought.
    b.  Opportunity  shall be afforded to the party to respond and present
  evidence and argument on the issues involved in  the  hearing  including
  the  right  of cross examination. In a hearing, the school or such party
  shall be accorded the right to have its representative appear in  person
  or  by  or with counsel or other representative. Disposition may be made
  in any hearing by stipulation, agreed settlement, consent order, default
  or other informal method.
    c. (1) The commissioner shall designate an impartial  hearing  officer
  to conduct the hearing, who shall be empowered to:
    (A) administer oaths and affirmations; and
    (B)  regulate  the  course of the hearings, set the time and place for
  continued hearings, and fix the time for  filing  of  briefs  and  other
  documents; and
    (C)  direct  the school or such party to appear and confer to consider
  the simplification of the issues by consent; and
    (D) grant a request for an adjournment of the hearing only  upon  good
  cause shown.
    (2)  The  strict  legal  rules  of  evidence  shall not apply, but the
  decision shall be supported by substantial evidence in the record.
    3. Decision after hearing. The  hearing  officer  shall  make  written
  findings  of  fact  and  conclusions of law, and shall also recommend in
  writing to the commissioner a final decision  including  penalties.  The
  hearing  officer  shall mail a copy of his findings of fact, conclusions
  of law and recommended penalty to the party and his or her attorney,  or
  representative.    The commissioner shall make the final decision, which
  shall be based exclusively on evidence and other materials introduced at
  the hearing. If it is determined that a party has committed a violation,
  the commissioner shall issue a final order and shall impose penalties in
  accordance with this section. The commissioner shall send  by  certified
  mail,  return  receipt requested, a copy of the final order to the party
  and his or her attorney, or representative. The commissioner  shall,  at
  the  request  of  the  school  or  such  party,  furnish  a  copy of the
  transcript or any part thereof upon payment of the cost thereof.
    4. Judicial review. Any order imposed  under  this  section  shall  be
  subject  to  judicial  review  under  article seventy-eight of the civil
  practice law and rules, but no such determination  shall  be  stayed  or
  enjoined  except  upon  application  to  the  court  after notice to the
  commissioner.
    5. Enforcement proceedings. The attorney general, in his  or  her  own
  capacity,   or  at  the  request  of  the  commissioner,  may  bring  an
  appropriate action or proceeding in any court of competent  jurisdiction
  to recover a fine or otherwise enforce any provision of this article.
    6.  Civil penalties and administrative sanctions. a. A hearing officer
  may recommend, and the commissioner may impose, a civil penalty  not  to
  exceed  two  thousand  five  hundred  dollars  for any violation of this
  article. In the case of a second or further violation  committed  within
  the  previous  five years, the liability shall be a civil penalty not to
  exceed five thousand dollars for each such violation.
    b.  Notwithstanding the provisions of paragraph a of this subdivision,
  a hearing officer may recommend, and the commissioner may impose a civil
  penalty not to exceed fifty thousand dollars for any  of  the  following
  violations:  (1) operation of a school without a license in violation of
  section five thousand one of this article; (2)  operation  of  a  school
  knowing that the school's license has been suspended or revoked; (3) use
  of   false,   misleading,   deceptive  or  fraudulent  advertising;  (4)
  employment of recruiters on the basis of a commission, bonus  or  quota,
  except  as  authorized by the commissioner; (5) directing or authorizing
  recruiters to offer guarantees of jobs upon completion of a course;  (6)
  failure  to make a tuition refund when such failure is part of a pattern
  of misconduct; (7) the offering of a course or program that has not been
  approved by the commissioner; (8) admitting students,  who  subsequently
  drop  out,  who  were  admitted  in violation of the admission standards
  established by the commissioner,  where  such  admissions  constitute  a
  pattern  of  misconduct and where the drop out resulted at least in part
  from such violation; (9) failure to provide the notice of discontinuance
  and the plan required by subdivision seven of section five thousand  one
  of  this  article;  or  (10)  violation  of  any other provision of this
  article, or any rule or regulation promulgated  pursuant  thereto,  when
  such  violation  constitutes  part  of  a  pattern  of  misconduct which
  significantly impairs the educational quality of the program or programs
  being offered by the school.  For each enumerated offense, a  second  or
  further  violation  committed  within  the previous five years, shall be
  subject to a civil penalty not to exceed seventy-five  thousand  dollars
  for each such violation.
    c.  In  addition  to the penalties authorized in paragraphs a and b of
  this subdivision, a hearing officer may recommend and  the  commissioner
  may  impose  any  of the following administrative sanctions: (1) a cease
  and desist order;  (2)  a  mandatory  direction;  (3)  a  suspension  or
  revocation  of  a  license;  (4)  a  probation order; or (5) an order of
  restitution.
    d. Penalty factors. In the recommendation of any  penalty,  a  hearing
  officer  shall,  at a minimum, give due consideration, where applicable,
  to the good faith of the violator; the performance of  the  school  with
  respect   to  student  placement  and  retention  rates,  and  students'
  acquisition of skills; the gravity of the violation; and the harm caused
  to the student.
    e. The commissioner may suspend a license  or  registration  upon  the
  failure  of  a  school  to  pay  any  fee,  fine, penalty, settlement or
  assessment as required by this article unless such failure is determined
  by the commissioner to be for good cause.
    f. All civil penalties, fines and  settlements  received  after  April
  first, nineteen hundred ninety shall accrue to the credit of the tuition
  reimbursement account established pursuant to section ninety-seven-hh of
  the state finance law.
    7.  Criminal  penalties.  In addition to any other penalties elsewhere
  prescribed:
    a. Any person who knowingly violates any of  the  provisions  of  this
  article  shall  be  guilty  of  a  class  B  misdemeanor  punishable  in
  accordance with the penal law. If the conviction is for a second offense
  committed  within  five  years  of  the  first  conviction  under   this
  paragraph,  such  person  shall  be  guilty  of  a  class  A misdemeanor
  punishable in accordance with the penal law.
    b. Any person who knowingly (1) falsifies or destroys school or  other
  business  records relating to the operation of the school with intent to
  defraud; (2) fails to make a tuition refund as required by section  five
  thousand  two  of  this article with the intent to defraud more than one
  person;  or  (3)  operates  a school without a valid license required by
  section five thousand one of this article shall be guilty of a  class  A
  misdemeanor punishable in accordance with the penal law.
    c. Any person who, having been convicted within the past five years of
  failing  to  make  a  tuition refund in violation of subparagraph two of
  paragraph b of this subdivision, knowingly and intentionally engages  in
  a  scheme  constituting a systematic ongoing course of conduct involving
  the wrongful  withholding  of  refunds  in  violation  of  section  five
  thousand  two  of  this  article  with the intent to defraud ten or more
  persons, and so withholds tuition refunds  in  excess  of  one  thousand
  dollars,  shall  be  guilty of a class E felony punishable in accordance
  with the penal law.
    d. Upon a determination that there exist reasonable grounds to believe
  that a violation of this article has been committed, or that  any  other
  crime  has  been  committed in connection with the operation of a school
  required to be licensed pursuant to this article, the commissioner shall
  refer such determination, and the information upon which it is based, to
  the attorney general  or  to  the  appropriate  district  attorney.  The
  attorney  general  or  a district attorney may bring an action on his or
  her own initiative.
    8. Private right of action. A student injured by a violation  of  this
  article  may bring an action against the owner or operator of a licensed
  private school or registered business school for actual damages  or  one
  hundred  dollars,  whichever is greater. A court may, in its discretion,
  award reasonable attorney's fees to a prevailing plaintiff.