News Summary
Two former executives of the Los Angeles Film School have filed a whistleblower lawsuit claiming the institution engaged in a fraud scheme involving fake job placements. The lawsuit alleges that LAFS misled students and federal regulators about its job placement success, resulting in significant financial gains from federal aid. The school reportedly faked thousands of job placements to inflate employability rates while actual job placement success for graduates was vastly lower than reported, leading to serious implications for the for-profit education sector.
Los Angeles
Two former executives of the Los Angeles Film School (LAFS), Dave Phillips and Ben Chaib, have filed a whistleblower lawsuit alleging that the school facilitated a massive fraud scheme involving fake job placements and deceptive practices. The lawsuit, initiated in June 2024, claims that LAFS has operated what can be described as a large-scale student loan scam that misled students and federal regulators alike.
According to the lawsuit, the school has arranged thousands of fraudulent job placements for its graduates to falsely demonstrate employability rates. Phillips, who served as the Vice President of Career Development, and Chaib, a former Vice President of Admissions, contend that nearly all federal student aid funding received by LAFS resulted from this fraudulent scheme. LAFS reportedly draws approximately $85 million annually in federal assistance, including $60 million from student loans and $19 million from veterans’ education grants.
The complaint reveals that LAFS graduates struggle to find work, with an internal agenda suggesting that many reported annual incomes ranging from $0 to $5,000. The executives allege that only about 20% of graduates could find employment independently, necessitating the artificial creation of job placements for the remaining 50% of graduates. The suit alleges that from 2010 to 2017, LAFS funneled nearly $1 million to Ivar Music Group and other firms to “hire” graduates for temporary positions lasting only two days.
One of the critical challenges posed by LAFS is that the school has purportedly generated a deceptive impression that its graduates were gainfully employed, thus misrepresenting its job placement success to both prospective students and regulators. LAFS is located on Sunset Boulevard in Hollywood and offers degree programs in fields like film and music production and animation, with tuition fees ranging from $40,000 to $80,000 per program.
Lawsuit Details and Implications
This legal action has broader implications, as it highlights ongoing issues of fraud within for-profit educational institutions. Past federal crackdowns on similar cases have led to the closure of schools such as Corinthian Colleges and ITT Technical Institute. The lawsuit also indicates that LAFS, which is owned by CEO James “Bill” Heavener and partners who control Full Sail University in Florida, may have employed comparable deceptive practices to satisfy accreditation benchmarks that require at least 70% of graduates to secure employment in their respective fields.
LAFS is expected to file a motion to dismiss the complaint on October 1. The school maintains that the allegations have already been scrutinized and resolved by the Department of Education. However, the lawsuit asserts that LAFS misled federal investigators during a 2017 audit by denying the existence of an incentive compensation system linked to student enrollment and failing to disclose payments made to Ivar Music Group.
Despite grappling with these allegations, LAFS received renewed accreditation from the Accrediting Commission of Career Schools and Colleges in 2023, extending its certification for another five years. Phillips and Chaib, who previously settled their contracts with LAFS—Phillips’s contract was not renewed, while Chaib’s ended in 2021—now claim they were coerced into releasing their assertions against the school as part of their settlements. They seek to recover fraudulently obtained student aid funds on behalf of the U.S. government, potentially earning 25% to 30% of any successful financial recovery.
The U.S. Department of Justice declined to intervene in this case last May, leading to the lawsuit’s unsealing and public visibility. The allegations against LAFS add to a growing list of similar infractions within the for-profit educational sector, as evidenced by significant settlements involving institutions like the University of Phoenix.
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Additional Resources
- Variety: Los Angeles Film School Fraud Allegations
- Google Search: Los Angeles Film School
- The Guardian: Los Angeles Film School Lawsuit Unsealed
- Google Scholar: Los Angeles Film School lawsuit
- Backstage: Film School Overstates Job Opportunities Lawsuit
- Encyclopedia Britannica: Educational Fraud
- Los Angeles Times: Hollywood Memorabilia
- Google News: Los Angeles Film School lawsuit
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LOS ANGELES STAFF WRITER The LOS ANGELES STAFF WRITER represents the experienced team at HERELosAngeles.com, your go-to source for actionable local news and information in Los Angeles, Los Angeles County, and beyond, specializing in "news you can use" with coverage of product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise from years of dedicated reporting and strong community input, including local press releases and business updates, while delivering top reporting on high-value events like the Academy Awards, LA Auto Show, and Los Angeles Marathon, extending coverage to key organizations such as the Los Angeles Area Chamber of Commerce and the Los Angeles Tourism & Convention Board, plus leading businesses in entertainment and technology like Warner Bros. and SpaceX, and as part of the broader HERE network including HEREAnaheim.com , HERECostaMesa.com , HEREHuntingtonBeach.com , and HERESantaAna.com , providing comprehensive, credible insights into Southern California's dynamic landscape. HERE Anaheim HERE Beverly Hills HERE Coronado HERE Costa Mesa HERE Hollywood HERE Huntington Beach HERE Long Beach HERE Los Angeles HERE Mission Viejo HERE San Diego HERE Santa Ana
