Ptc Institute Shuts Doors Owners Accused Of Misusing Funds

Posted: March 15, 1994

A trade school accused of misusing federal education money has suddenly

closed, throwing 200 instructors out of work and depriving 1,600 students of the classes they paid to attend.

The school, PTC Career Institute, operated in Philadelphia and five other cities until it closed without notice last week. Yesterday, a group of angry students who had paid about $4,000 each for a five-month nursing assistant course gathered in frustration outside the PTC facility at 40 N. 2nd St.

"We've been hearing all kinds of rumors about the school being in debt and teachers not getting paid," said Janet Peterson, 26, of North Philadelphia. ''They kept pushing the graduation back, to April 8, then April 23, then May. Last week, it was closed due to the heating system breaking down. We can't get any information."

A hand-lettered sign on the front door of the three-story structure said, ''Due to a broken heater motor we will be closed until further notice." The sign was dated March 7.

The students said they were instructed to call the school for further information, only to hear a message that said: "PTC is temporarily closed. As soon as we have further information we will contact all students and staff."

The Philadelphia PTC employed about 50 instructors in nursing assistance, private security, building maintenance and various aspects of computer operation. About 300 students were enrolled.

Joel Sweet, an attorney for PTC, said the company closed its six schools

because the U.S. Department of Education had cut off funds "without justification." Those funds, in the form of grants and loans, helped students pay for their classes.

Almost all of PTC's students here and in Atlanta, Baltimore, Newark, Detroit and Chicago received some sort of government tuition aid. Sweet said that without the assistance, which constituted a substantial part of PTC's $16 million in annual revenues, the schools could not remain open.

In a Jan. 5 letter to PTC owners Richard and Rimona Friedberg, however, the Department of Education said it was withholding funds because of the Friedbergs' misuse of the federal money, including paying themselves salaries of $300,000 each and paying their two sons and a daughter-in-law $200,000 each.

The Freidbergs, both 52, were convicted in separate trials of evading more than $130,000 in taxes. At their trials, testimony was presented accusing them of spending that amount to fix up their $700,000 Villanova home, then writing it off as a PTC business expense. They are free pending appeals.

Stephanie Babyak, a spokeswoman for the Education Department, said her agency is contacting the states where PTC operated to enlist their help in putting together "teach-outs," in which affected students would finish their courses at other schools.

The Pennsylvania Department of Education said PTC's license here expired March 1.

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