Guyana-born school director implicated in U.S. diploma scam
By Jason Felch, Times Staff Writer
August 31, 2004
`I, as principal…have accepted my calling from God to help the Hispanic population.’ – Guyana-born Daniel Gossai
AN ADULT school accused of selling bogus high school diplomas to thousands of immigrants paid churches to help recruit students and house classes, according to interviews with law enforcement, school and church officials.
The disclosure has roiled congregations and raised questions about the role of some church leaders in the operation.
The commercial California Alternative High School paid some churches in immigrant communities across Southern California an average of $125 per graduate and allowed the churches to keep income from the sale of school materials, according to interviews and court records.
After 30 hours of classes, students were given a diploma that school officials said would give them access to accredited colleges and universities and state and federal financial aid programs, according to court records.
But a lawsuit filed this month by the state attorney general accused school operators of "exploiting immigrants' dreams of a better life."
According to court records, the school used untrained teachers who taught that there are 53 states in the union, four branches of government and two houses of Congress — one for Republicans and one for Democrats.
The attorney general's suit seeks restitution for students and $32 million in penalties, charging that the program lied to students when it told them it was recognized by the state and federal governments. So far, no church officials have been implicated in the alleged fraud, though two former employees of World Mission Maranatha Evangelistic Center were named in the civil suit.
Some parishioners said they were disturbed by the financial link between the church leaders they trusted and the school they believed deceived them.
"With the faith we are given as children, we are taught to believe the pastor no matter what. That's what makes us vulnerable," said Maria Moreno, 55, a nursing assistant in Sylmar who said she took the class because she wanted to become a registered nurse. "Now I'm confused, angry. All these people use these churches to rip us off."
Josefina Roa and 20 other parishioners who took the classes have demanded an explanation from the pastor of their church in Reseda. Roa, who needed a diploma to keep her job as a teacher's assistant with the Los Angeles Unified School District, said: "You come with your faith, and you believe, but these papers aren't worth anything."
In an interview, the school's director, Daniel Gossai, denied that his school misled students but said that "every pastor, every church organization where we have classes was being given certain amounts of money."
Of the average $600 per student charged for the 10-week course, church leaders were given a $75 to $175 donation, Gossai said. In addition, some churches kept the money they charged for caps and gowns, photos and school supplies.
Authorities are continuing their investigation of California Alternative High School, which claims 78 locations nationwide and might have taught tens of thousands of students.
Seized records confirm that some of the more than 30 churches where classes were held received payments, investigators said, but they have not reviewed records for all the churches. Investigators believe most churches were duped along with their parishioners.
"That was part of the brilliant idea Gossai had — using the trust that congregants have in their church leaders," said Rigoberto Reyes, an investigator with the Los Angeles County Department of Consumer Affairs.
Officials at five churches interviewed by The Times said they accepted donations from the alternative high school as rent for the space used and to offset the costs of classes. A sixth church denied having received any money from the school. Officials at all the churches said they thought the school was providing a valuable service for parishioners.
"We're devastated that it was not a viable program," said Diane Hernandez, an elder at Canoga Park Presbyterian Church, which discontinued the classes after being warned by a former student that the diplomas were not valid.
But court documents and interviews indicate that Maranatha had a particularly close relationship with the school.
Starting in 2000, the seven-branch church based in Bellflower allowed its facilities to be used for the classes. Gossai said the church played a key role in the school's success, providing more than half of the students and receiving more than $1 million in donations in return.
Moreno, the student from Sylmar, attended classes at a Maranatha church in South Gate with more than 100 other students in May 2002. In addition to $575 in tuition, she says she paid the church $50 for the class workbook, $80 to rent the required cap and gown for graduation, and $225 for optional graduation photos. She says she turned down the $25-per-person graduation meal and the graduation rings that were offered, and never had to pay the $150 make-up fee for missed classes.
"The church said they didn't keep a cent," Moreno said.
Frederico Sayer, the attorney for Maranatha's founder and pastor, Jose Luis Soto, said the alternative school gave the church a donation of $179 for each person who graduated from the program. Sayer would not comment on the other amounts Moreno said she paid the church. Gossai says the church received a portion of the tuition fees.
Sayer said the church allowed the school to offer classes for 15 months as "a community service, because it was assured that [the school] was legitimate." The pastor and his church were "as much a victim as the students who attended these classes," the attorney said.
But in April 2002, Sayer said, the pastor ended Maranatha's relationship with the alternative school after hearing two negative stories from graduates, and urged his son, David Soto, to start a corporation separate from the church.
In the lawsuit, the attorney general has accused David Soto and his company, West Side Education Corp., of participating in the scheme with the alternative school. West Side's director, Noel Brito, a former Maranatha employee, is also named in the suit. West Side lists Maranatha's South Gate church as its corporate headquarters, according to court records. Sayer said the classes were held at church facilities until 2003.
David Soto and Noel Brito could not be reached for comment.
Sayer says Maranatha never received money from West Side Education Corp., and never thought the diplomas it offered were fraudulent.
In an interview at a South Gate Burger King that has served as his office since the attorney general filed suit, Gossai described with pride how he built the school into a national chain over the last four years.
The idea was hatched in 1980, when the immigrant from Guyana and former pastor said he saw a need for education in the Latino community.
A company brochure quotes Gossai as saying: "I, as principal…have accepted my calling from God to help the Hispanic population."
The idea for the schools lay dormant for 15 years, Gossai said, while he earned a master's degree in business administration and two doctorates.
In court records, authorities have questioned the authenticity of the two doctoral degrees.
One institution, an unaccredited university in Los Angeles, denied that Gossai had attended, and the other, a university in Aruba in the Caribbean, "may be of questionable validity," the attorney general wrote in court papers.
In 2000, Gossai launched a handful of schools in Los Angeles and named himself principal. The school's website and materials offer students an "Adult High School Diploma."
What Gossai knew but most students did not, investigators say, is that private high schools are virtually unregulated by state or federal law.
Gossai says it is not deceptive to call what his school offers a diploma.
"It would be illogical, unreasonable and irrational for you to believe or anyone to think that in four weeks they can get a high school diploma," he said.
Nevertheless, his students say they were sold binders that said "High School Diploma" in bold letters across the front.
"He thinks he's found the perfect loophole," said Reyes, of the county Department of Consumer Affairs. "But there's a law that says you can't misrepresent what you sell." (Reprinted from yesterday’s Los Angeles Times)