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Prosecutors call Florida nursing school ‘fraud’ ring that handed out fake degrees

A former registrar of a Palm Beach County nursing school served as the “right-hand” woman to the school’s owner as both schemed to lure in thousands of students and charge them millions of dollars for fake transcripts and degrees so they could qualify to attain licenses as nurses, a prosecutor told jurors Wednesday during opening statements of a federal trial in Fort Lauderdale.

Before trial, the owner of Palm Beach School of Nursing, Johanah Napoleon, pleaded guilty to a wire fraud conspiracy, was sentenced to 21 months in prison and paid about $3.5 million in financial penalties to the U.S. government.

But before Napoleon surrenders to prison authorities in mid-December, she is expected to be the prosecution’s main witness in the federal trial of her school’s former director of student services, Gail Russ, and two other defendants accused of recruiting students from the Northeast into the alleged diploma-mill scheme.

“Gail Russ is the hub of the activity,” Assistant U.S. Attorney Christopher Clark told the 12-member jury Wednesday. “Without Gail Russ, there is no transcript. Without Gail Russ, there is no diploma. Without Gail Russ, you have nothing. ... The money is flowing in, and everybody is profiting.”

Russ is among 14 defendants charged in South Florida with conspiracy and wire fraud in connection with Napoleon’s alleged nursing-school diploma racket. All but three have pleaded guilty.

That leaves Russ, along with the two other defendants, facing trial on charges of collecting between $15,000 and $20,000 from thousands of nursing students for phony degrees from the Palm Beach School of Nursing and Quisqueya School of Nursing, which were owned by Napoleon. Both are “for profit” schools that the state shut down for poor performance on licensing exams in 2018, but that continued to operate illegally for another three years, Clark said.

Standing trial with Russ are two healthcare operators from the Northeast, Cassandre Jean and Vilaire Duroseau, who are accused of recruiting students for the two Palm Beach County nursing schools and pocketing illicit commissions.

Clark, the prosecutor, told jurors that Russ and the other defendants committed fraud against the state, the nursing students, their employers and patients at hospitals and clinics in Florida, New Jersey, New York, Texas and Ohio.

“These defendants perpetrated a fraud on so many people in order to make money,” said Clark, adding that the government’s evidence includes FBI undercover recordings, nursing school records, financial statements, emails, text messages and other documents.

Attorneys for Russ and the other two defendants, however, presented a dramatically different view of the evidence, describing Napoleon as a “liar” who is only testifying against them in an effort to lower her prison sentence.

One of Russ’ defense lawyers, Samantha Vacciana, argued that her client may have been the record-keeper of transcripts at Napoleon’s nursing schools, but she did not have any interaction with students and did not verify their grades.

“It was her job to input that information,” Vacciana said, trying to distance Russ from allegations that she conspired with Napoleon to fabricate the students’ transcripts so they could attain their diplomas and sit for the state nursing exam in New York, which allowed repeated test-taking if necessary.

Vacciana told the jurors to be wary of Napoleon and other cooperating witnesses sentenced to prison who will be testifying against Russ and the other two defendants over the next two week.

“You, the jurors, will have to judge their credibility,” said Vacciana, who is representing Russ with colleague Grey Tesh. “But I will tell you, they have a lot to gain from taking the stand.”

The defense attorneys for Jean and Duroseau hit even harder on that point.

‘Convicted fraudsters’

“The most important thing you have to know is that these witnesses are ‘convicted fraudsters,’ ” one of Jean’s lawyers, Omar Malone, told jurors. “They are going to take the witness stand and lie to you like they’ve never lied before.”

Malone said Jean, a registered nurse who came to know Napoleon when she sent students from New York to South Florida to enroll in the Palm Beach School of Nursing, said his client made legitimate referrals and received legal commissions for her work.

You can’t be deceived into thinking that just because she [Jean] made a lot of money that she did something wrong,” said Malone, who is representing her with colleague Roderick Vereen.

A defense attorney for Duroseau, who ran a school in New Jersey that taught students to become licensed practical nurses and prepared them for the state exam, said his client also did business with Napoleon after referring some pupils to her nursing schools in Palm Beach County.

“They both made money” off these student referrals, Duroseau’s lawyer, Thomas Payne said, but added that his client “had no idea” that Napoleon was falsifying transcripts and degrees.

“This woman was responsible for 5,000 false transcripts and diplomas,” Payne told the jurors. “You know what she was sentenced to? 21 months. ... She will do anything and say anything to get her way. You will see that the deal that the government made with her was a deal with the devil.”

At the beginning of this year, prosecutors with the U.S. Attorney’s Office in Miami rattled the healthcare industry and Haitian-American community when they unveiled a batch of criminal cases charging about 25 defendants who had ownership interests in or worked as employees and recruiters for Palm Beach School of Nursing in Lake Worth — as well as other for-profit schools, including Sacred Heart International Institute in Fort Lauderdale and Siena College of Health in Lauderhill. Almost all of those defendants have pleaded guilty.

More arrests expected

While those schools have been closed, the federal crackdown continues and more arrests are expected in connection with the investigation, which began with a tip four years ago.

The network of nursing school operators, centered in South Florida, illegally charged each student between $10,000 for a licensed practical nurse degree and $20,000 for a registered nurse diploma — without requiring proper training, according to federal authorities and court records. The fake diplomas also came with phony transcripts to bolster the “fraudulent” nursing students’ records, federal prosecutors said in court papers.

In doing so, the scofflaw schools provided a shortcut for students to avoid taking a one-year LPN or two-year RN program requiring clinical work, national exams and certification, while instructors coached them on taking the licensing exams to practice nursing in a number of states, prosecutors said.

Many of the students who purchased degrees were from South Florida’s Haitian-American community, including some with legitimate LPN licenses who wanted to become registered nurses, U.S. Attorney Markenzy Lapointe said at a news conference earlier this year. Other students were recruited from out of state to participate in the fraudulent nursing programs.

An estimated 7,600 students paid a total of $114 million for bogus nursing degrees from the South Florida schools and other suspect programs between 2016 and 2021. Of those, one-third, or about 2,400 students, ended up passing their licensing exams, mainly in New York, which imposes no limit on the number of times that students can take the exam. Nurses certified in New York have the ability to practice in other states, including Florida.

Many of the students who passed the nursing exams have lost their certification — though they won’t be criminally charged, according to federal authorities. At the beginning of the year, the FBI said it notified nursing boards in all 50 states about every student who obtained a fake nursing degree and passed the exam.

The Health and Human Services Office of Inspector General in Miami said that, despite obvious public concern, the investigation has found no harm caused by any suspect nurses to patients.