The lewis International School, one of the Washington area's oldest vocational trade schools, has closed its doors amid a series of investigations into its use of nearly $1.5 million in federal and state aid to students.
The collapse of the 63-year-old school, which was padlocked Nov. 5 by the Internal Revenue Service for alleged nonpayment of $142,869 in federal employe withholding taxes, has stranded dozens of mainly black, low-income Lewis students in the area.
Many of the students face uncertain futures, including the burden of repaying federal loans they took out to meet the school's $1,298 tuition for six-month courses in hotel management, dental technology, and other subjects.
The Virginia Department of Education, reacting to "numerous" complaints from students drawn here by promises of an education in a campus-style setting, yesterday scheduled a Dec. 12 hearing on the practices of the school's state-licensed recruiters.
Located for years on Washington Circle in Northwest, the school moved in 1978 to a warehouse in Far Northeast. Many students were housed in shabby apartments in Dominion Gardens in Alexandria, more than an hour away by Metrorail and bus.
The U.S. Department of Health, Education and Welfare, responding to a Nov. 14 request by Rep. James J. Florio (D-N.J.), has begun a probe of the institution, which recently claimed between 75 and 100 employes and a $1.2 million annual payroll.
Consumer affairs agencies in Alexandria and the District also are looking into the activities of the school and its officers.
Investigators are focusing on the school's handling of federal grants and loans administered on behalf of the students, several sources said. They also are interested in an offer made last July by school officials to purchase an abandoned elementary school in Alexandria for $1 million.
The offer coincided with the school's alleged failure to pay withholding taxes. At the same time, rent and food subsidy checks issued to students were bouncing at area stores, officials and several students said.
"We don't know what we have here," said one puzzled federal official. "It may be fraud or it may be mismanagement. What's clear is that a lot of kids got screwed."
Lewis school president Joseph L. Ferrare could not be located for comment. The former director of the school, George J. Hoyer, said he had "no knowledge" of the school's finances, but denied the school did anything illegal.
Alexandria developer Bryan Gordon Jr., identified in a confidential Alexandria report as vice president of the school's "Alexandria branch," was killed Nov. 2 in a crash of a light plane he was piloting. Gordon owned the school from 1975 to 1978 before selling out to Ferrare, according to official documents.
One former student, Rosalyn Slappy, 27, of Philadelphia, has told federal and local officials that she saw a poster for the Lewis school in a Philadelphia laundromat last spring, and called the telephone number listed on it.
"A recruiter showed up at my house the same day. He asked me if I could use an address in New Jersey, so I could apply for a loan at a Camden (N.J.) bank," she said in a recent interview.
Slappy said the recruiter encouraged her to get a loan rejection letter from the Camden bank so she could apply for federal assistance.
Federal funds for qualified students are turned over to schools to use on the students' behalf, officals said.
John W. Mullins, vice president of the Tri-County Savings and Loan Association in Camden, N. J., said that during the summer students were coming to his bank "in droves" to apply for loans, even though he had previously told a Lewis official that loans would only be granted to people with accounts at the bank.
"Some of them didn't even ask for loans. They just wanted the rejection letter," Mullins said.
With the rejection letter in hand, Slappy and others applied for and received federal funds, usually $1,200 in Basic Education Opportunity Grants (BEOG), and $2,500 in National Direct Student Loans.It is the handling of these funds that investigators are now probing.
Several students have also told officials that classroom equipment used in some vocational courses did not work and that textbooks for one course that started in July did not arrive until September.