The Federal Bureau of Investigation is looking into the financial practices of one of the largest trade school chains in Southern California, sources disclosed Wednesday.
The chain, Los Angeles-based Iade American Schools, has an 800-student campus in Oxnard. Until recently, it served about 3,500 mostly Latino students at six campuses throughout Southern California.
Iade American suspended most of its classes at the end of last week, citing financial problems, but has pledged to reopen at least five campuses by Monday.
Employees at the 10-year-old Oxnard campus said they have not been paid for about two weeks but are continuing to work for the sake of the students. Classes at the school have not been affected.
"We're working without pay with the expectation that the problem will be resolved, and we will be reimbursed in the future," said Lenoardo Sabana, a computer instructor at the school. "We who work within the machinery of the school have met, and we are convinced that things are clean, and the situation will be cleared up."
Gonzalo Freixes, general counsel for Iade, denied any knowledge of the FBI investigation and said his company was working to resolve questions raised by vocational school regulatory agencies that threaten its accreditation.
Sources familiar with the FBI investigation did not disclose the specifics of the inquiry, but it is believed to parallel issues raised by the state regulatory agency, the Council for Private Postsecondary and Vocational Education.
Les Cochren, manager of student and consumer protection for the state agency, said one of the chief issues he is probing is whether Iade has made proper reimbursements to the federal government of federal loan and grant funds.
The school receives an estimated $10 million to $12 million in federal tuition aid annually.
In addition to campuses in Oxnard and Santa Ana, Iade has schools in Los Angeles, North Hollywood, El Monte and South Gate.
Freixes said his company's differences with the agency were technical matters, but acknowledged that the chain has faced hard times lately and shut down most of its classes to discuss a reorganization plan with its employees. That plan will be launched next week as campuses reopen.
"We're trying to keep the cuts as far from the classroom as possible," Freixes said.
Times staff writer Miguel Bustillo contributed to this report.