Goodwin president must retire in 5 years in loan-fraud settlement

May 27—EAST HARTFORD — Goodwin University President Mark Scheinberg has agreed to retire from Goodwin and University of Bridgeport within five years, as part of a settlement with the federal government over allegations of loan fraud, U.S. Attorney for the District of Connecticut Vanessa Roberts Avery announced Friday.

In addition, Scheinberg and Stone Academy agreed to pay more than $1 million to resolve allegations that they violated the federal False Claims Act by concealing a series of money order payments made by Scheinberg to prevent certain loans from being counted in Stone Academy's student loan default rate, and for failing to disclose Stone Academy's actual, higher default rate to the U.S. Department of Education, Avery said.

Stone Academy, a for-profit school that awards medical diplomas, has campuses in East Hartford, Waterbury, and West Haven. It's owned by Scheinberg.

As part of the settlement, Scheinberg agreed to retire as president of Goodwin and as a member of University of Bridgeport's Board of Trustees within five years, and to have "no further involvement in the operations of Goodwin and Bridgeport after his retirement."

Goodwin acquired the University of Bridgeport a year ago.

The settlement also requires Scheinberg to cease involvement with and transfer all of his ownership interests in Stone Academy and Paier College of Art, another for-profit school, to a third party.

"Scheinberg agrees that he will not accept any other paid position at Goodwin other than as an 'External Ambassador,'" which will have no management, supervisory, or board membership roles, the settlement says.

The settlement also says that Scheinberg also agrees to accept no other paid position at University of Bridgeport, Stone Academy, or Paier College of Art, and accept no appointment to the Board of Directors of all the aforementioned schools.

A spokesperson for Scheinberg said Scheinberg has no immediate plans to retire.

Avery said the settlement addresses allegations that Scheinberg concealed money order payments made on the behalf of Stone Academy students to prevent loans from counting in the school's student loan default rate.

School that have too high default rates may lose Title IV loan eligibility as part of administrative consequences.

Avery's office said that between February 2015 and March 2019, 154 such payments, ranging from $50 to roughly $507, were made on behalf of 102 students without their knowledge or consent, and "in a manner intended to conceal the fact that these payments were made by Scheinberg and Stone Academy."

Stone Academy also failed to disclose the actual default rate to the Department of Education, which would constitute a violation of the federal False Claims Act.

In a prepared statement, Scheinberg referred to the incident as a "mistake," and said that although the increase in Stone Academy's default rate would have been "immaterial," he chose to agree to the settlement in order to "put the dispute behind (him)."

"At 66 years old with much yet to accomplish, I have chosen to devote my remaining educational career to the important work that brings joy to my life — creating new opportunities that students with diverse talents and backgrounds can use to succeed," Scheinberg said.

The Goodwin University's Board of Trustees said in a statement that the school is not involved with the incident or affiliated with Stone Academy in any way, and that Goodwin has been planning for the "eventual retirement" of Scheinberg for several years.

"The civil settlement agreement that Mark Scheinberg retire within five years does not change our plans," the board said.

Scheinberg founded Goodwin University, previously named Goodwin College in 1999, and has served as the school's only president since.

The school has expanded its facilities in East Hartford and recently received a $2 million state grant to build a marina on the Connecticut River.

Joseph covers East Hartford and South Windsor. He joined the JI in July 2021. Joseph graduated from the University of Connecticut and he is an avid guitarist and coffee enthusiast.