Suit alleges community college fraudulently collected student fees

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A new class-action lawsuit claims Hawaii Community College fraudulently collected “hundreds of thousands of dollars” in student fees throughout the past decade.

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A new class-action lawsuit claims Hawaii Community College fraudulently collected “hundreds of thousands of dollars” in student fees throughout the past decade.

The complaint was lodged May 21 in Hilo Circuit Court by lawyers representing three students who formerly served as student government officials.

Just more than a year ago, complaints made by the plaintiffs — former student government treasurer David Canning, former Student Activities Board treasurer Marieta Carino, and former student government president Eric Aranug — spurred then-state Sen. President Donna Mercado Kim to call upon the University of Hawaii Board of Regents to investigate the collection and use of student funds at the college.

The complaints from the students and Kim centered around the fact that students at the University of Hawaii at Hilo and Hawaii Community College had long shared a number of services, including a radio station, recreation facilities, a campus center and subscriptions to the Ke Kalahea student news magazine. But the students claimed HCC’s students did not receive the same access to those services as UH-Hilo’s students did.

According to the newly filed suit, for years HCC collected $67 a semester for student services, including $19 for the student news publication, $18 for student activities, $18 for student government, $7 for campus center fees, and $5 for recreation.

Between 2007 and 2014, 47,671 students were enrolled at the school, each of whom was charged the $67 fee, totaling nearly $3.2 million in charges, the suit alleges.

Peter Hsieh, a Honolulu-based attorney for the plaintiffs, explained Thursday that total does not necessarily represent the amount of money charged for services that weren’t rendered to the students.

“We don’t know what UH is going to say, what their defense is with respect to what services were actually provided to the students and how accessible those services were versus not providing other services which they charged the students for. So, I think it’s a mixed bag. If the students didn’t get the services they were told they were going to get, then the amount of fees that were related to those services would be considered fraudulently obtained monies,” he said.

However, the “defendant knew that the student services either were not available or were not exclusively available to the students, but failed, neglected, and/or refused to inform the students of this fact,” the suit reads.

The suit seeks to represent each of the students who paid fees during the period, and seeks damages in an amount to be determined at trial.

Beginning in 2013, the three students, in accordance with their student government and council officer positions, began asking questions and requesting financial documents to determine how the student fees were being spent.

“Despite numerous repeated requests by Canning, Carino, and/or Aranug for an audit, budget, financial and fiscal documents, and/or an accounting of income and expenses relating to the mandatory student fees, Defendant, through its employees, representatives, and/or agents, failed, neglected, and/or refused to comply,” the complaint states.

The suit also alleges that when the students attempted to address the student fees questions in student government or council meetings, college employees “publicly chastised, ridiculed, and/or humiliated them with false and misleading accusations.”

University of Hawaii spokesman Dan Meisenzahl said Thursday that UH had not yet received the lawsuit, and therefore could not comment on the allegations. He added that “normally, in matters of ongoing litigation, we will hold off from commenting until the procedure works itself out.”

A similar complaint filed by the same students in October 2014 with the U.S. District Court was dismissed Wednesday. The case was dismissed “without prejudice,” meaning it can be re-filed in the future.

The plaintiffs opted to pursue the case during the past year in the U.S. District Court in an attempt to make a Qui tam claim, Hsieh said. Qui tam lawsuits allow for whistleblowers who file lawsuits against people or companies who defraud the government to receive rewards of up to 35 percent of the funds recovered.

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“We dismissed (the federal suit) because the only basis we had to go to federal court was to pursue the Qui tam claim,” he said. “But because of certain technicalities, we could not assert the Qui tam under the circumstances of this case because it involves a state agency, and Qui tam complaints don’t apply to state agencies. When we dismissed that count, it basically eliminated the only basis upon which a lawsuit could be brought in the federal court system.”

Email Colin M. Stewart at cstewart@hawaiitribune-herald.com.

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