(Updates with Kaplan statement in eighth paragraph.)
July 22 (Bloomberg) -- A former dean at Washington Post Co.’s Kaplan University unit was sentenced to one year and one day in prison for sending and posting Internet messages threatening the school and Kaplan Inc. Chief Executive Officer Andrew Rosen.
Bennie Wilcox was convicted by a federal jury in Chicago on six criminal counts last year. U.S. District Judge Blanche Manning, who sentenced Wilcox yesterday, didn’t impose a fine. The judge said Wilcox should report to prison on Sept. 16 and recommended a federal prison camp in Pensacola, Florida, on the request of the defense. Wilcox faced a maximum sentence of 18 years in prison.
“My major problem is the fact that upon being confronted with the actions you took, there was never a genuine acceptance of responsibility,” Manning told Wilcox.
Wilcox, 45, a former Kaplan University dean of law and legal studies, was indicted in March 2008, a year after he and two other men filed a federal whistleblower lawsuit against the university and Chicago-based Kaplan Higher Education Corp. in Tampa, Florida, alleging they were receiving federal student loan proceeds under false pretenses.
“I would just ask that you weigh the mixed bag that is Ben Wilcox,” Wilcox said to the judge before he was sentenced. He added that “the last four years have been a very humbling experience.”
Kaplan Higher Education and its university are part of New York-based Kaplan Inc., which operates an online school and maintains 70 campuses in 20 states, according to its website.
About 92,000 people are enrolled in the schools, according to a Washington Post Co. statement announcing its first-quarter performance on May 6, a 23 percent decline from the same time last year.
“We are glad that we can finally put these unfortunate events behind us,” Kaplan said in an e-mailed statement.
The Kaplan schools and other for-profit colleges have come under increasing federal and state government scrutiny because of student loan default rates, which are twice as high as those for students attending public colleges and universities and three times as high as non-profit private schools.
President Barack Obama’s administration announced new “gainful employment” rules June 2 that it said were intended to compel for-profit schools to better prepare their students for jobs that would allow them to repay their loans.
Schools that failed to meet the new requirements three times over a four-year span would be stripped of their eligibility to participate in U.S. student loan programs for three years.
The new regulations take effect on July 1, 2012, meaning that the earliest a non-compliant school could be rendered ineligible is in 2015, according to a Department of Education statement.
Kaplan hired Wilcox in 2005 and fired him the next year. He was charged with sending threatening and harassing communications after the company turned over its evidence to authorities.
“We respect the court’s decision,” Kaplan said yesterday in a statement about the sentencing. “A jury convicted Mr. Wilcox on all six felony counts, and the judicial process has run its course. We are glad that we can finally put these unfortunate events behind us.”
Wilcox denied writing the 2007 e-mail messages and Internet postings underlying the criminal charges and claimed he’d been framed for his role in filing the whistleblower case.
“On July 13th, 2007, we will take all of KU down and off line forever,” said a June 11, 2007, message attributed by prosecutors to Wilcox and sent under another employee’s name. Another message sent that day threatened Kaplan’s CEO, Rosen.
Prosecutors presented evidence that they said tied Wilcox to the messages as well as handwritten and videotaped confessions he disavowed when testifying at the trial.
Testifying in his own defense, Wilcox said he witnessed Kaplan executives commit “multiple schemes” to defraud the U.S. and taxpayers out of $1 billion, with his complicity, by inflating grades and increasing enrollment numbers.
The fraud allegations against Kaplan are untrue and the company “vigorously” denies them, Kaplan spokesman Ron Iori said in a telephone interview before the Dec. 10 verdict.
“Some other judge, some other jury will address whether the allegations against Kaplan University are true,” Assistant U.S. Attorney Joel Hammerman said in his closing arguments on Dec. 9. “You have the evidence to show that Mr. Wilcox’s confessions were true.”
Wilcox recanted those confessions, testifying that he made them in an attempt to shield his wife, whom he said he thought might have written the e-mails and Web postings after being traumatized by an alleged sexual assault by another Kaplan executive.
“He had every reason to believe that his wife may have been capable of having done it,” defense lawyer Beau Brindley told jurors then. “Ben Wilcox sincerely believes that Kaplan is responsible. Ben Wilcox didn’t do it himself.”
The case is U.S. v. Wilcox, 08cr256, U.S. District Court, Northern Division of Illinois (Chicago).
--Editors: Peter Blumberg, Mary Romano
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