United States Department of Education

Not long before they closed, the Department of Education ("DOE") audited CRI and found they were overcharging students on the loan program.  DeNise Hill informed CRI of this in a May 31, 2005 letter and a November 10, 2005 letter.  CRI responded back on with this January 27, 2006 letter.  Students, who were unaware of the problems for the most part, were abruptly told by CRI's financial aid people that "rules had changed at the Dept of Ed and they were no longer eligible for as much money as they used to be" so they would have to start paying out of their own pockets - another spin put on the truth by CRI.  The rules had not changed - CRI had previously been overcharging. This caused even more students to leave, though CRI tried to prod them into staying by finding them private loans. One student was even told she might consider refinancing her home to get money that way.

Many students complained about financial aid improprieties to the DOE in Seattle, DeNise Hill specifically, as well as complaining to NELA, Sallie Mae, Accrediting Council for Independent Colleges and Schools ("ACICS") (CRI's accrediting agency).  Only the Department of Education expressed any interest.   

DeNise Hill allegedly indicated that CRI had been nothing but trouble and was on the "radar screen" for years over their financial dealings. In a later December 1, 2006, letter, she stated:

The investigation you reference in your letter was the September 30, 2003 program review.  The length of this review has been a result of the complexity of the finding, the number of students and academic years and the total amount and type of financial aid involved.  We are aware that is has been a long process and to date, we are still actively seeking a satisfactory solution.

She states she visited the school many times to see Mr. Janisch about his penchant for bouncing living expense checks to students, claiming the department took that seriously.  She heard all of the stories Mr. Janisch had given to students as he had told her the same ones: A disgruntled student had stolen the corporate checkbook and written checks, causing them to bounce; the check printer had made an error and they had to close the account, etc.  They pretty much recycled the same stories. 

Other information was reported to DeNise Hill regarding CRI in San Diego and their practice of billing for 4500 hours instead of the 3000 they were entitled to charge for.  They too were "repackaged" shortly before they closed and given the same story about the rules changing.  As of June 2007, two former students have filed Freedom of Information Act Requests for Education Department program reviews of CRI.

DeNise Hill was informed of the recruiters signing contracts with aliases, specifically Tom Girgus and Mike Girgus - signing as Tom Fielding and Mike Stiles.  She was also informed of other fraudulent things that went on at CRI.  Senator Maria Cantwell’s office became involved and began communicating with the Department of Education directly.

In July of 2007, Linda Henderson of the Department of Education responded to Washington Senators Maria Cantwell and Patty Murray who had sought explanations regarding CRI pursuant to requests from CRI students that an investigation by the Department of Education, Office of the Inspector General be commenced.  This is Ms. Henderson's response to Ms. Cantwell and Ms. Murray. 

Janisch/CRI's Flaunting of Department of Education Regulations

In order to comply with Dept. of Ed. regulations for participation in the Federal Student Assistance Program a school has to show financial responsibility.  The way a school does this is by submitting its financial records to the Dept. of Ed. for audit.  For at least ten years, when the time for submission came along, Janisch would borrow funds from friends, namely Kai Molkdskred and Steve Fleischman in order to pump up the balance sheet each year before the audit.  As soon as the audit was over, he simply returned the money.