Federal Court Rules Lawsuit Against Dream Center Foundation Can Continue

A federal court ruled Monday that Student Defense’s lawsuit against the Dream Center Foundation can continue, an important development that sets the stage for discovery and potential relief for students harmed by the organization’s deception and fraud. Student Defense sued the Dream Center Foundation and its subsidiaries in 2018 for lying to students about the loss of accreditation at for-profit colleges it owned and subsequently closed.  

The court’s order, in the Northern District of Illinois, rejected the Dream Center Foundation’s arguments that it had nothing to do with the fraud perpetrated by the schools it owned. The decision cites the “apparent web of interlocking officers and directors among the Dream Center entities at issue in this case,” including Randall Barton who was serving simultaneously as Managing Director of DCF and chairman of the board and Chief Development Officer for DCF subsidiary Dream Center Education Holdings, the direct owner of the schools. The order highlights Barton’s participation in “an allegedly nefarious decision not to appeal the HLC accreditation decision” that was being concealed from students.

“The Court’s decision allows us to prove the Dream Center Foundation’s culpability for the deception and misconduct experienced by students attending the schools it owned,” said Student Defense Litigation Director Eric Rothschild.  “We expect to find out even more about how the Foundation prioritized its for-profit school business over the best interests of students.”

The next step in the litigation will be discovery and depositions to better determine the full extent of wrongdoing by the Foundation and its executives.

The court order is available here: https://www.defendstudents.org/news/body/2020.01.06-Order-Denying-DCF-MTD.pdf

More background on the case, Dunagan v. Illinois Institute of Art, and related documents, can be found here.