As the request of the Federal Trade Commission (the “FTC”), on September 16, 2014, the U.S. District Court for the Southern District of Florida imposed a temporary restraining order to halt the business operations of Diversified Educational Resources, LLC (DER), and Motivational Management & Development Services, Ltd. (MMDS), and freeze their assets. The FTC’s lawsuit seeks a permanent injunction to stop the defendants’ deceptive practices and to return ill-gotten gains to consumers, which according to a preliminary review of bank records referenced in the lawsuit were more than $11,117,800 since January 2009.
The complaint alleges that the defendants violated the FTC Act by misrepresenting that the diplomas were valid high school equivalency credentials and that the online schools were accredited. The FTC charges that the defendants actually fabricated an accrediting body to give legitimacy to their diploma mill operation. DER and MMDS allegedly sold the diplomas since 2006 using multiple names, including jeffersonhighschoolonline.com, jeffersonhighschool.us, enterprisehighschool.us, and ehshighschool.org, which purport to describe legitimate and accredited secondary school programs such as “Jefferson High School Online” and “Enterprise High School Online.” The websites claim that consumers can become “high school graduate[s]” and obtain “official” high school diplomas by taking an online exam and paying between $200 and $300. In numerous instances, consumers who attempt to use their Jefferson or Enterprise diplomas to enroll in college, enlist in the military, or apply for jobs are rejected because of their invalid high school credentials.