§ 5003. Disciplinary actions, hearings and penalties. 1. Disciplinary
action. a. The commissioner for good cause, after affording a school an
opportunity for a hearing, may take disciplinary action as hereinafter
provided against any school authorized to operate under this article.

b. Good cause shall include, but not be limited to, any of the
following:

(1) fraudulent statements or representations to the department, the
public or any student in connection with any activity of the school;

(2) violation of any provision of this article or regulation of the
commissioner;

(3) conviction or a plea of no contest on the part of any owner,
operator, director or teacher:

(A) of any of the following felonies defined in the penal law: bribery
involving public servants; commercial bribery; perjury in the second
degree; rewarding official misconduct; larceny, in connection with the
provision of services or involving the theft of governmental funds;
offering a false instrument for filing, falsifying business records;
tampering with public records; criminal usury; scheme to defraud; or
defrauding the government; or

(B) in any other jurisdiction of an offense which is substantially
similar to any of the felonies defined in clause (A) of this
subparagraph and for which a sentence to a term of imprisonment in
excess of one year was authorized and is authorized in this state
regardless of whether such sentence was imposed; or

(4) incompetence of any owner or operator to operate a school.

c. (1) Any person who believes he or she has been aggrieved by a
violation of this section, except a person aggrieved by the actions or
omissions of a candidate school, shall have the right to file a written
complaint within: (A) two years of the alleged violation; or (B) one
year of receiving notification from the higher education services
corporation or any other guarantee agency that the student has defaulted
on a student loan payment; provided, however, that no complaint may be
filed after three years from the date of the alleged violation. The
commissioner shall maintain a written record of each complaint that is
made. The commissioner shall also send to the complainant a form
acknowledging the complaint and requesting further information if
necessary and shall advise the director of the school that a complaint
has been made and, where appropriate the nature of the complaint.

(2) The commissioner shall within twenty days of receipt of such
written complaint commence an investigation of the alleged violation and
shall within ninety days of the receipt of such written complaint, issue
a written finding. The commissioner shall furnish such findings to the
person who filed the complaint and to the chief operating officer of the
school cited in the complaint. If the commissioner finds that there has
been a violation of this section, the commissioner shall take
appropriate action.

(3) The commissioner may initiate an investigation without a
complaint.

(4) Notwithstanding the provisions of subparagraph one of this
paragraph or any other provision of this article to the contrary, a
student at a candidate school shall have the right to file a written
complaint from an alleged violation of the provisions of clause three of
subparagraph (iv) of paragraph b of subdivision four of section five
thousand one of this article that require disclosure of candidacy status
and its implications and a signed attestation by the student, within two
years of such violation. Upon a finding that such a violation has
occurred, the candidate school shall be required to provide a refund of
all monies and fees received from or on behalf of the student.
Appropriate action shall also be taken against the candidate school
pursuant to the provisions of subparagraph (iv) of paragraph b of
subdivision four of section five thousand one of this article.

(5) No owner, operator, licensed personnel, or agent thereof of a
licensed private career school shall discriminate, intimidate, or
retaliate against any person who files a written complaint pursuant to
this paragraph.

2. Hearing procedures. a. Upon a finding that there is good cause to
believe that a candidate school under the provisions of subparagraph
(iv) of paragraph b of subdivision four of section five thousand one of
this article, or a licensed school, or an officer, agent, employee,
partner or teacher, has committed a violation of this article, the
commissioner shall initiate proceedings by serving a notice of hearing
upon each and every such party subject to the administrative action. The
school or such party shall be given reasonable notice of hearing,
including the time, place, and nature of the hearing and a statement
sufficiently particular to give notice of the transactions or
occurrences intended to be proved, the material elements of each cause
of action and the civil penalties and/or administrative sanctions
sought.

b. Opportunity shall be afforded to the party to respond and present
evidence and argument on the issues involved in the hearing including
the right of cross examination. In a hearing, the school or such party
shall be accorded the right to have its representative appear in person
or by or with counsel or other representative. Disposition may be made
in any hearing by stipulation, agreed settlement, consent order, default
or other informal method.

c. (1) The commissioner shall designate an impartial hearing officer
to conduct the hearing, who shall be empowered to:

(A) administer oaths and affirmations; and

(B) regulate the course of the hearings, set the time and place for
continued hearings, and fix the time for filing of briefs and other
documents; and

(C) direct the school or such party to appear and confer to consider
the simplification of the issues by consent; and

(D) grant a request for an adjournment of the hearing only upon good
cause shown.

(2) The strict legal rules of evidence shall not apply, but the
decision shall be supported by substantial evidence in the record.

3. Decision after hearing. The hearing officer shall make written
findings of fact and conclusions of law, and shall also recommend in
writing to the commissioner a final decision including penalties. The
hearing officer shall mail a copy of his or her findings of fact,
conclusions of law and recommended penalty to the party and his or her
attorney, or representative. The commissioner shall make the final
decision, which shall be based exclusively on evidence and other
materials introduced at the hearing. If it is determined that a party
has committed a violation, the commissioner shall issue a final order
and shall impose penalties in accordance with this section. The
commissioner shall send by certified mail, return receipt requested, a
copy of the final order to the party and his or her attorney, or
representative. The commissioner shall, at the request of the school or
such party, furnish a copy of the transcript or any part thereof upon
payment of the cost thereof.

4. Judicial review. Any order imposed under this section shall be
subject to judicial review under article seventy-eight of the civil
practice law and rules, but no such determination shall be stayed or
enjoined except upon application to the court after notice to the
commissioner.

5. Enforcement proceedings. The attorney general, in his or her own
capacity, or at the request of the commissioner, may bring an
appropriate action or proceeding in any court of competent jurisdiction
to recover a fine or otherwise enforce any provision of this article.

6. Civil penalties and administrative sanctions. a. A hearing officer
may recommend, and the commissioner may impose, a civil penalty not to
exceed three thousand five hundred dollars for any violation of this
article, including a school's failure to offer a course or program as
approved by the commissioner. In the case of a second or further
violation committed within five years of the previous violation, the
liability shall be a civil penalty not to exceed seven thousand five
hundred dollars for each such violation.

b. Notwithstanding the provisions of paragraph a of this subdivision,
a hearing officer may recommend, and the commissioner may impose a civil
penalty not to exceed seventy-five thousand dollars or double the
documented amount from which the school benefited, whichever is greater,
for any of the following violations: (1) operation of a school without a
license in violation of section five thousand one of this article; (2)
operation of a school knowing that the school's license has been
suspended or revoked; (3) use of false, misleading, deceptive or
fraudulent advertising; (4) employment of recruiters on the basis of a
commission, bonus or quota, except as authorized by the commissioner;
(5) directing or authorizing recruiters to offer guarantees of jobs upon
completion of a course; (6) failure to make a tuition refund when such
failure is part of a pattern of misconduct; (7) the offering of a course
or program that has not been approved by the commissioner; (8) admitting
students, who subsequently drop out, who were admitted in violation of
the admission standards established by the commissioner, where such
admissions constitute a pattern of misconduct and where the drop out
resulted at least in part from such violation; (9) failure to provide
the notice of discontinuance and the plan required by subdivision seven
of section five thousand one of this article; or (10) violation of any
other provision of this article, or any rule or regulation promulgated
pursuant thereto, when such violation constitutes part of a pattern of
misconduct which significantly impairs the educational quality of the
program or programs being offered by the school. For each enumerated
offense, a second or further violation committed within five years,
shall be subject to a civil penalty not to exceed one and one-half times
the amount of the previous violation for each such violation.

c. In addition to the penalties authorized in paragraphs a and b of
this subdivision, a hearing officer may recommend and the commissioner
may impose any of the following administrative sanctions: (1) a cease
and desist order; (2) a mandatory direction; (3) a suspension or
revocation of a license; (4) a probation order; or (5) an order of
restitution.

d. Penalty factors. In the recommendation of any penalty, a hearing
officer shall, at a minimum, give due consideration, where applicable,
to the good faith of the violator and the gravity of the violation.

e. The commissioner may suspend a license upon the failure of a school
to pay any fee, fine, penalty, settlement or assessment as required by
this article unless such failure is determined by the commissioner to be
for good cause.

f. All civil penalties, fines and settlements received after April
first, nineteen hundred ninety shall accrue to the credit of the tuition
reimbursement account established pursuant to section ninety-seven-hh of
the state finance law.

7. Criminal penalties. In addition to any other penalties elsewhere
prescribed:

a. Any person who knowingly violates any of the provisions of this
article shall be guilty of a class B misdemeanor punishable in
accordance with the penal law. If the conviction is for a second offense
committed within five years of the first conviction under this
paragraph, such person shall be guilty of a class A misdemeanor
punishable in accordance with the penal law.

b. Any person who knowingly (1) falsifies or destroys school or other
business records relating to the operation of the school with intent to
defraud; (2) fails to make a tuition refund as required by section five
thousand two of this article with the intent to defraud more than one
person; or (3) operates a school without a valid license required by
section five thousand one of this article shall be guilty of a class A
misdemeanor punishable in accordance with the penal law.

c. Any person who, having been convicted within the past five years of
failing to make a tuition refund in violation of subparagraph two of
paragraph b of this subdivision, knowingly and intentionally engages in
a scheme constituting a systematic ongoing course of conduct involving
the wrongful withholding of refunds in violation of section five
thousand two of this article with the intent to defraud ten or more
persons, and so withholds tuition refunds in excess of one thousand
dollars, shall be guilty of a class E felony punishable in accordance
with the penal law.

d. Upon a determination that there exist reasonable grounds to believe
that a violation of this article has been committed, or that any other
crime has been committed in connection with the operation of a school
required to be licensed pursuant to this article, the commissioner shall
refer such determination, and the information upon which it is based, to
the attorney general or to the appropriate district attorney. The
attorney general or a district attorney may bring an action on his or
her own initiative.

8. Private right of action. A student injured by a violation of this
article may bring an action against the owner or operator of a licensed
private career school for actual damages or one hundred dollars,
whichever is greater. A court may, in its discretion, award reasonable
attorney's fees to a prevailing plaintiff. No owner, operator, licensed
personnel, or agent thereof of a licensed private career school shall
discriminate, intimidate, or retaliate against any student who brings a
private right of action against the owner or operator of a licensed
private career school pursuant to this subdivision.