News

Outraged Ex-Employees of Training Company Allege Theft, Fraud

First in a series: After more than 10 years of loyal service to the company, Tanya Prince figured she was due for some loyalty back.

• By Keith Ward
• 03/18/2003

Instead, she learned that loyalty is sometimes a one-way street.

Prince started working with ExecuTrain of Tampa, Florida in May 1992. When she was laid off last December from the company that by 2000 had morphed into Global Training Solutions Southeast, she received no severance pay, no pay for unused vacation days. She's lucky, in fact, that she got her paycheck. Others in her office laid off the same day didn't.

"It's just not right," Prince lamented. "It's just very sad, very sad."

GTS' problems go deeper than just a lack of loyalty, however. According to ex-contract MCTs and a number of ex-employees, GTS may be in violation of several laws, has closed at least one regional office, (with several others teetering on the brink of extinction), and is facing a deluge of lawsuits from creditors.

MCP Magazine first reported on GTS last November, after hearing from many MCTs who claimed to have been ripped off by the company. You can read the story here: http://www.mcpmag.com/news/article.asp?EditorialsID=527. At that time, MCTs who had signed contracts with GTS said they weren't being paid and were owed anywhere from $1,500 to more than $8,000. GTS' problems have only escalated since then, and more ex-contractors and ex-employees have come forward to tell their stories.

In this special four-part series, MCP Magazine explores in detail the legal problems GTS has brought on itself, examines the state of the IT training industry overall, and shares advice about how to choose a training provider with integrity and staying power.

This article reports specifically on GTS Southeast, which is distinct from Global Training Solutions Northeast. The latter company, with headquarters in Framingham, Massachusetts, also provided IT training services, but, according to its Web site at http://gts-ne.com, is no longer in business.

GTS Southeast's Web site at http://www.globaltrain.com lists 25 separate training facilities, from Florida to California, Miami to Boston. Yet, a phone call to any one of the operations lands at the same desk in the Miami headquarters.

Public documents show that GTS Southeast owner Eric A. Schaer is the owner of at least 32 different companies registered in Florida. The Florida Department of State, Division of Corporations, lists GTS' address as 8240 NW 52nd Terrace, Suite 500, Miami, FL 33166. A partial listing of other companies Schaer owns include The Linux Institute, LC; Falcon Capital L.L.C.; ETF Technologies, Inc.; Anova Training, Inc.; Apogee Training, Inc.; Theta Training, Inc.; and Ocean Computer Associates, Inc. Headquarters for the other companies vary, although all appear to be in Florida. Some are in Miami, others in Maitland, Tampa and Jacksonville.

A number of those companies have been sued, some for many thousands of dollars:

• Northpoint Corporate, a GTS landlord, won a $33,832.44 judgment against ETF on Sept. 25, 2002.
• Schaer was ordered to pay Theresa O'Neill a total of $2,838.37 on Feb. 4, 2003. O'Neill and her husband, Bob, have been leaders in the fight to get Schaer and GTS to pay invoices. The final judgment notes that "The Defendant(s) failed to appear."
• Linda Robins & Associates won a judgment of $10,302.38 against ETF on Feb. 20, 2002.
• In a case filed in Miami on March 7, 2002, Barbee Davis won a judgment of $5,477.49 against ETF, after initially seeking $15,000.

This is just a sampling of cases either pending or settled against Schaer's companies. Plaintiffs include ExecuTrain Corp., Tokai Financial Svsc Inc. and the Miami Herald Publishing Co., among others.

One plaintiff in a lawsuit against Schaer's company, the Linux Institute, is Keith Q. Hicks, a former owner of ExecuTrain of Florida. Hicks and his partners sold the ExecuTrain franchise to Schaer in October 2000. Due to pending litigation, Hicks declined comment.

It's more than just former employees and contractors who feel betrayed by GTS. Jimmie Fitzgerald, of Melbourne, Florida, said he signed up for four MCSA classes, and completed just one at the Melbourne office before the rest were cancelled. Ever since, he's been trying to get a refund for the remainder of the $3,750 loan he obtained through Sallie Mae. He said GTS mailed a check to Sallie Mae for the remaining amount, but the check bounced, leaving Fitzgerald responsible for the loan.

Fitzgerald, a system and database administrator, said Sallie Mae is also looking suspiciously at GTS. "Sallie Mae let me know I wasn't the only [student] having problems with GTS. They were considering dropping them as a company" to which they'd extend loans.

Sallie Mae has, in fact, discontinued its relationship with GTS. "We stopped doing business with them right around November 2002. They're no longer a customer of ours," said Rich Tondo, Sallie Mae's East Coast Sales Manager.

Meanwhile, Fitzgerald has no training, no certification for which he'd gone into debt. And he's steering his peers away from GTS. "The folks you [GTS] train are plenty tired of canceled classes, and there has been a noticeable drop in training requests within my team," Fitzgerald said in a post on the www.mcpmag.com Web site. He also added that he plans to sue the CTEC.

Those suing Schaer's companies don't often see him in court. Several contract MCTs told MCP Magazine that it's typical of Schaer to fail to appear, and some suspect it's an intentional attempt to delay legal proceedings.

This was confirmed by Prince, who was Regional Director of Finance and Administration for three GTS offices—Tampa, Orlando and Jacksonville—from March 2002 until she was laid off last Dec. 16. Prince said that she was told by Schaer and Kirk DeLeon, Schaer's attorney, to appear in court in a case brought by an MCT contractor seeking payment. They told her, she says, that she was only to deliver an affidavit. "In Orange County [Orlando], every small claims case goes immediately to arbitration, so there is no judge," Prince explained. "So they took us into a mediation room. I had to say I'm not authorized to participate in arbitration, I'm just [there] to give an affidavit. [The court then] scheduled a trial date at that time, in civil court."

Prince said that Schaer "Had me do the same thing over again, with another contract instructor. They know all it's going to do is prolong the suit and wait another 60 days until the trial. It was just a way [by Schaer] to not deal with it."

That isn't what bothers Prince the most, however. She says that $2,114.50 was deducted from her paychecks between June and November 2002 for her 401(k) plan, and the money was never deposited into her retirement account. To her, that sounds like stealing. When asked if she believed GTS is engaging in theft or fraud, Prince said simply, "Yes, I do."

It's impossible to ascertain GTS' current financial situation, but it's clear the company is struggling. The Atlanta office was closed on Feb. 15, and most offices are working with skeleton staffs. According to one ex-employee recently let go by GTS, only three offices—Jacksonville, Orlando and Tampa—have sales staffs. The same employee, who asked not to be identified, said morale at the company is "terrible. Everybody's waiting for the other shoe to drop. Every month something happens—the payroll structure gets changed, people don't get paid."

Some people were trying to get contractors and others their money, though. Scott Lehman was director of operations for the Jacksonville and Atlanta offices for a year before leaving in 2002. It didn't take him long in his new job with GTS before "I started looking for another job, because every day it was a constant battle to get people paid." As director of operations, Lehman was often the first line of complaint for contractors and vendors.

He says stonewalling was the standard company method of operation. "A contractor would contact me and ask about payment. I was instructed to tell them I'd look into it and get back to them. The Accounts Payable manager in Miami, Cathy Smith at the time, always instructed me [to say] that they're doing their best to make the payments, and if the instructor had problems, to call her. They would call her and she would never return the phone calls. She admitted it to me one time. I'd call down there for the contractors because they were constantly calling me. I'd ask if she returned their phone calls, and she'd tell me no." Smith didn't respond to a voice message seeking comment on Lehman's statements.

Next: A Pattern of Non-Payment