In the Matter
SCHOOLS, Student Financial Assistance Proceeding
Respondent. ACN: 09-20014
Appearances: Abraham Stofenmacher, President of IADE American
Schools of Tarzana, CA, for IADE American Schools.
Stephen M. Kraut, Esq., Office of the
General Counsel, United States Department
of Education, Washington, D.C., for Student Financial Assistance Programs.
Before: Judge Ernest C. Canellos
P ursuant to 34 C.F.R. Part 668, Subpart H , IADE submitted a request for a hearing challenging the findings of the FAD. On July 26, 1995, I issued an Order Governing Proceedings requiring IADE to file a submission in support of its position within four weeks of its receipt of my order. On December 13, 1995, SFAP filed a Motion For Default Judgment on the ground that IADE failed to comply with my order. On December 14, 1995, in response to SFAP's motion, I ordered IADE to show cause why I should not issue a decision
dismissing its appeal of the FAD and entering judgment against it for failure to prosecute the
appeal. I required IADE to respond to my order
on or before January 2, 1996. Although most of
the offices of the United States Department of Education were closed on January 2,
1996, due to a partial Federal Government shutdown, IADE neither filed a submission
responding to my order nor requested an extension of time for filing a submission.
Notwithstanding six months have passed since IADE requested a hearing to challenge the
FAD, IADE has not filed any subsequent submission in this proceeding in compliance with my
In accordance with my obligation to regulate the course of this proceeding and the conduct of the parties, I have the authority and the discretion to terminate the hearing process and issue a decision against a party if that party does not meet time limits established pursuant to my orders. See, 34 C.F.R. § 668.117(c)(3) . As such, I find that IADE's failure to file submissions in compliance with my orders warrants the termination of this proceeding. More important, a fter a review of the FAD, I am convinced that the findings contained therein sufficiently state allegations in a manner that would require IADE to carry its burden of proof in this proceeding .See footnote 1 1 IADE's failure to submit evidence supporting its position compels me to find that IADE failed to carry its burden of proof in establishing that the institution's expenditure of Title IV funds during the period at issue was proper.
On the basis of the foregoing findings of fact and conclusions of law, it is HEREBY ORDERED that the hearing process initiated pursuant to the institution's request for a hearing is TERMINATED. It is FURTHER ORDERED that in accordance with the Final Audit Determination IADE American Schools pay to the United States Department of Education the sum of $1,022,981 and reimburse $435,000 to the appropriate Title IV lenders .
Ernest C. Canellos
Dated: January 24, 1996
A copy of the attached initial decision was sent by certified mail, return receipt requested to the
IADE American Schools
P.O. Box 572769
Tarzana, CA 91356
Stephen M. Kraut, Esq.
Office of the General Counsel
U.S. Department of Education
600 Independence Avenue, S.W.
Washington, D.C. 20202-2110