State regulators continue to investigate allegations that Portland Beauty School falsified student records, sold hours to students who never attended the school and misused federal retraining money.
Health licensing officials, flanked by police officers, seized boxes of records from the school last week. State employment, education and justice officials also are involved.
It's the second beauty school targeted by Oregon Health Licensing Agency in less than a year. The agency licenses hairstylists, barbers and nail technicians to work in the state.
It also comes a month after the state temporarily halted exams for cosmetologists and nail technicians after concluding its integrity had been breached.
Richard Vial, an attorney for the school, denied the allegations and said school owners Mary Huynh and her children, Mytien and Tieno, have no idea why the raid occurred.
"We're just baffled," Vial said "They still have not given an indication of what they're charging."
An affidavit filed last week in Multnomah County by agency regulatory operations manager Tim Molloy sheds some light.
According to Molloy, the agency received information from "a reliable and credible source" alleging the school falsified student records, transcripts, social security numbers and state testing materials.
The informant alleged the school sold educational hours to students from other states who have not attended the school but who get correct answers to state and national cosmetology exams.
"Basically, people weren't going to school," said Kraig Bohot, the agency's spokesperson. "They were buying exam answers."
The students then work in other states that accept Oregon licenses, Molloy's affidavit said.
Oregon Department of Justice spokesman Tony Green, whose agency heads the investigation, declined comment.
The Oregon Employment Department oversees federal money to retrain trade-impacted workers. It's awaiting results of the licensing investigation before deciding whether to look into the school's use of worker retraining money and unemployment insurance, department spokesman Tom Fuller said.
Portland Beauty School has been a popular retraining destination for laid-off factory workers. From 2000 to 2003, it received more than $1.5 million in federal NAFTA-Transitional Adjustment Assistance to retrain laid-off factory workers -- more than any private or community college in the state, an investigation by The Oregonian found.
More recently, in December 2008, the licensing agency sought a warrant to search Anthony's Beauty School, according to Multnomah County Circuit Court records. Anthony's competed with Portland Beauty School, which has since closed, Vial said.
In August, days after taking the job, agency director Randall Everitt sent an "urgent" notice to beauty schools to tell them he was temporarily halting exams for cosmetologists and nail technologists after an outside review found "the integrity of the examination has been compromised." The state later resumed the exams after switching from computer-based testing to written exams, according to the notice.
Vial said the Oregon Department of Education, which oversees private trade schools, paid a visit to the school earlier this year after receiving allegations of test fraud but left satisfied.
He said Vietnamese students taking the state cosmetology exam have been singled out and searched by state officials ever since the agency took action against Anthony's. He accused the agency of targeting the school and students based on race.
"We're being scrutinized basically because of the nationality of the owners," Vial said.
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