The Los Angeles Film School is at the center of a whistleblower lawsuit from two former executives who allege the institution unlawfully collected government funds in an elaborate accreditation scheme.
Dave Phillips and Ben Chaib, the school’s former VP of career development and VP of admissions, respectively, allege in a federal lawsuit that the L.A. Film School violated federal employment requirements and accrediting standards. The lawsuit also names LAFS’ Florida counterpart Full Sail University, its main owner James Heavener and two other business partners as defendants.
The lawsuit, originally filed in L.A. federal court in June 2024, was recently unsealed after the Department of Justice opted to not investigate.
Representatives of LAFS could not be immediately reached for comment but have previously denied the claims.
In statement to Variety last week the school’s attorneys said that Phillips and Chaib are attempting “to resuscitate time-barred and erroneous allegations, which were already thoroughly investigated and settled by the Department of Education.”
For a university to be accredited and receive federal funding, the accreditation criteria state that a school must successfully instruct 70% of its students to land and hold jobs for which they are trained. The plaintiffs argue that graduates from the film school are unable to receive entry-level positions, citing an internal report which shows that most graduates earn $5,000 or less in their field of study. Only 20% of students were able to find work, the suit alleges.
LAFS receives over $85 million a year in federal financial assistance, including about $60 million in federal student loans, and more than $19 million in veterans’ financial aid funds. The Winter Park, Fla.-located Full Sail University, which teaches curriculum in entertainment-adjacent fields, also gets over $377 million per year in federal financial assistance, according to the complaint.
“For at least the last ten years, nearly all federal funds bestowed upon and taken in resulted from fraud with the institution using taxpayer funds to finance and facilitate multiple, temporary employment positions for LAFS graduates,” the lawsuit states.
Seeking to continue collecting government funds, the university is alleged to have spent nearly $1 million (between 2010 and 2017) to provide temporary employment from nonprofits and paid-off vendors. These jobs would usually last two days; LAFS would determine who would be hired, their schedule and wage. Students were led to believe these opportunities were “in-house production opportunities” and “post-graduate apprenticeships,” but instead, they were schemes planned and paid for by the school to remain an accredited university, according to the lawsuit.
Federal law prohibits higher education from “provid[ing] any commission, bonus, or other incentive payment based directly or indirectly on success in securing enrollments.” When LAFS was audited in 2017, the plaintiffs further allege that the school misled the Department of Education auditors, denied the existence of the incentive compensation system and failed to disclose their connection to vendors.
Beyond collecting these federal funds, the former executives argue that the school misled students and potential enrollees by overstating the availability of jobs and making untrue or misleading statements related to employment.
LAFS was created in 1999 and is located on Sunset Boulevard in Hollywood. It offers a variety of bachelor’s and associate degrees in areas including film, film production and animation, with tuition ranging between $40,000 and $80,000.
Both plaintiffs, Phillips and Chaib, worked at the film school for 12 years and were members of the senior executive team. Phillips’ contract was not renewed in 2022.
The Accrediting Commission of Career Schools and Colleges recently renewed the school’s accreditation in 2023 for a five-year period.