An Alhambra real estate school that authorities say sold completion certificates without requiring classroom attendance or passing grades has had its license revoked by the state in what state officials are calling the first fraud case of its kind.
The president of the New Method Institute, Andrew H.C. Wai, has pleaded no contest to misdemeanor criminal charges of conspiring to sell real estate diplomas and has paid a $1,175 fine.
As many as several hundred certificates may have been sold for $100 each, authorities say.
The fraudulent certificates made holders automatically eligible to take a state Department of Real Estate exam to become licensed real estate salespersons or brokers.
Since May, DRE investigators have been questioning all license applicants who say they studied at New Method Institute, 27 W. Main St., Suite F. So far, they've found four applicants with bogus certificates.
"We're screening them manually as they come in," said Steve Ellis, the DRE's Los Angeles district office manager. "It could very well be a 1,000 (who paid for false certificates)."
Besides withdrawing approval for all pre-licensing and continuing education courses offered at the school, effective as of last Tuesday, the DRE was seeking to revoke Wai's broker and corporate license.
"I don't think Mr. Wai will be teaching real estate courses again as far as the Department of Real Estate is concerned," said Willam Moran, deputy DRE commissioner. "In some cases, Wai did actually teach, but whether or not students wanted to attend was their option."
Wai could not be reached. His office said he was in Taiwan.
Ironically, "quite a few" people who purchased false certificates from New Method without attending classes were able to pass the DRE exam and obtain licenses, Moran said.
Before administering the exam, the DRE requires that prospective salespersons pass one college-level course, and that prospective brokers pass eight courses. Once they are licensed, salespersons and brokers must take one continuing education course every four years to renew their licenses.
A secretary at New Method Institute who asked that her name not be used said she was unaware that the school's license was revoked and said the school was continuing to enroll people in night classes taught by Wai and two other teachers.
The school, a one-room suite in a complex that houses travel agencies and retail stores in downtown Alhambra, caters mostly to Chinese in the San Gabriel Valley and almost all courses are taught in Mandarin. The school charges $200 for a pre-licensing course and $150 for a continuing-education course.
New Method is one of 144 private real estate schools in California approved by the DRE. Most community colleges and Cal State campuses also offer the courses.
According to DRE records, the department began investigating New Method in March, after an anonymous caller said the school was offering Chinese prospective brokers fake certificates for both pre-licensing and continuing-education courses.
Two days later, a Chinese-American deputy real estate commissioner with the DRE's Los Angeles office posing as a real estate student was able to pay another secretary $107 for a certificate of completion showing he attended 35 hours of a Real Estate Principles class and passed an examination with a grade of "B," DRE records show.
Later, the secretary told the deputy commissioner, Johnny Oh, that he could have all eight real estate courses listed on the certificate for another $800, DRE records state.
In May, Oh approached Wai and asked if a friend of his could get a diploma too. Wai "then asked him if he had the right amount of money and Oh delivered . . . $99," DRE records say.
The next day, in Wai's presence, the secretary gave Oh a certificate in the friend's name, saying the friend had completed a 45-hour course and received a "B" on the final examination.