The U.S. Attorney's Office here subpoenaed student financial aid records of the Lacaze-Gardner business school yesterday as part of an continuing investigation by federal authorities to determine whether the school gave ineligible students federal loans and grants according to a source.
A spokesman for the Washington field office of the FBI said its investigation of Lacaze-Gardner was begun in September at the request of the Department of Health, Education and Welfare. HEW has provided substantial federal aid to students attending the school.
In an interview published in The Post last week, James Butler, who said he worked as a top salesman for Lacaze-Gardner for 18 months, said he routinely falsified student financial aid documents when he worked at the school.
"We signed up almost every person who walked throught he door with some kind of financial aid," Butler said. "If their income was too high to get federal student aid, we wrote figures on the applications that guaranteed them eligibility. Whatever needed changing, we changed it."
In an barupt and unexplained move last Wednesday, Daniel Grossman, who owns Lacaze-Gardner, announced that the Institution, which has encountered many problems in recent months was not accepting new students at the downtown facility of the school of which has branches in Langley Park and Falls Church.
Grossman said that the approximately 900 students already enrolled would be allowed to complete their nine months of study and that the earliest the school would close would be July 31, 1979.
On Friday, two fires broke out in the two buildings occupied by Lacaze-Gardner downtown at 710 14th St. NW and at 1424 NEw York Ave. NW and all classes for the day were halted.
Monday morning, about 100 students arrived at the school for regular classes and found a handwritten note stating that the school was "closed until further notice." The school's entire faculty of 21 teachers said they had been fled over the weekend by Grossman.
The D.C. fire marshal's office, which said a series of smaller unreported fires had occurred at Lacaze-Gardner last week, ordered the school closed on Monday until all fire hazards in its two buildings have been corrected.
The Lacaze-Gardner School has been under federal scrutiny since last May, when a routine review of student financial aid records at the school turned up some discrepancies.
In a report that followed the review, the U.S. Office of Education report also estimated an 80 percent maintained that Lacaze-Gardner appeared to have received an inordinate amount of student financial aid. The report also estimated an 80 percent dropout rate at Lacaze-Gardner, which draws inner-city black students to its downtown facility.