Owners of Connecticut nursing school ‘committed a massive fraud’: attorney general in expanded complaint

October 24, 2023

By: Kathryn Hauser

HARTFORD, Conn. (WTNH) — Connecticut is expanding its case against Stone Academy eight months after the school’s abrupt closure in February, Attorney General William Tong announced Monday.

Tong filed a 22-page amended complaint under the Connecticut Unfair Trade Practices Act, alleging that the owners of Stone Academy siphoned millions of dollars through unfair and deceptive practices that left hundreds of students scrambling.

“We’re finding evermore disturbing information,” Tong told reporters in Prospect.

The complaint alleged that the school’s owners, Joseph Bierbaum and his stepfather, Mark Scheinberg, paid themselves nearly $5 million in distributions during those two years despite exam pass rates faltering and students not receiving the proper tools and materials they would need.

“As Stone enrolled more PN (Practical Nurse) students than it could handle at the height of the COVID-19 pandemic, its revenues swelled,” page 13 of the complaint stated. “Stone’s net income increased from approximately $660,000 per year in 2019 to well over 3 million per year in each of 2020 and 2021.”

However, the state said students at the school never benefited from this money.

“Giving almost none of it [money] back in the form of services, textbooks, they can’t even get heated classrooms and definitely not qualified instructors,” Tong said.

So, where exactly did the money go?

The attorney general said it went to places like Bierbaum’s $ 1.4 million, 9,000-square-foot home in Rocky Hill, luxury cars and their other businesses.

But the bigger question is: will nursing students get their $30,000 a year in tuition back?

“The owners committed a massive fraud – feels like and looks like a huge Ponzi scheme to line their pockets,” Tong said. “All I care about is holding them accountable and making these students whole.”

News 8 contacted Bierbaum’s attorney, Craig Rabbe, who said they are “not commenting at this time.” They head back to court on Nov. 1 for a prejudgment remedy.

Senate Republican Leader Kevin Kelly, the ranking Senator on the legislature’s Higher Education and Employee Advancement Committee, issued a statement on the attorney general’s expansion of the case.

“I applaud the Attorney General for continuing to pursue justice in this unfortunate situation. Stone Academy apparently did not fulfill its promise to its students, and for that there must be consequences. In the legislature this year, we worked in bipartisan fashion to pass legislation to provide direct relief to former Stone Academy students. We have a nursing shortage, and it is essential that we as elected officials work across multiple branches of government to help these students get their careers back on track and make them whole.”