Judge Stanley Blumenfeld dismissed a whistleblower lawsuit against Los Angeles Film School with prejudice in a US court. The court found that much of the conduct described in the complaint occurred outside the six-year statute of limitations.
The lawsuit claimed Los Angeles Film School engaged in massive student loan fraud by using inflated placement statistics to keep its accreditation and eligibility for federal funding. Specific allegations included the school paying Ivar Music Group to hire students for two-day jobs and claims against CEO James “Bill” Heavener.
Heavener also owns Full Sail University in Winter Park, Florida, but the judge ruled that the claimants failed to provide sufficient details regarding that institution. Judge Stanley Blumenfeld sanctioned attorney Mark Kleiman for submitting a 76-page brief generated by ChatGPT that cited a non-existent case, Darwich v. Department of Economic Security.
A $5,000 fine was imposed on Kleiman for the filing. Dave Phillips admitted to drafting the brief using ChatGPT, while Kleiman informed opposition counsel that his non-lawyer clients had prepared the document with artificial intelligence.
Kleiman told opposition counsel he intended to withdraw from the case. Judge Stanley Blumenfeld stated, "Kleiman filed an obviously deficient brief that he had not even fully read and for which he did not check whether the citations were to real cases — let alone that they supported the brief’s assertions — despite knowing that his nonlawyer clients had prepared the brief using AI."
