Lawsuit alleges improprieties in cosmetology school

A former employee is suing the Fountain of Youth Academy of Cosmetology and its owner alleging financial improprieties, defamation and retaliation.

Jennifer Michael, of Hopewell, filed the complaint against the school and owner Cheri Herold on Tuesday in federal court. It also includes claims under the state whistleblower act.

Herold, when reached on Friday, called allegations against her “ludicrous,” and said the lawsuit was “frivolous.” She referred questions to her attorney, John Silvestri. He called the claims in Michael’s complaint false

Michael was terminated on Nov. 7. Her attorney, Christi Wallace, declined to comment outside of what is included in the lawsuit.

According to the 44-page complaint, Michael began working for the school, with locations in Mars and Squirrel Hill, in April as the operations manager and said in the lawsuit she immediately noticed “major ‘red flags.’”

As part of her job duties, Michael answered incoming calls at the school. She claimed that the majority were from students complaining about the program and financial aid. The lawsuit said the students complained that Herold misled them.

Michael said in the complaint that she confronted Herold about it.

“She was told things such as, ‘these students are losers because they couldn’t complete the program’ or ‘these students couldn’t afford to pay for the program,’” the lawsuit said.

Among the complaints, the lawsuit said:

• students were told their financial aid covered tuition, kits and everything necessary to complete the program, when it did not;

• students were told they would earn grants to cover the program cost, when they did not;

• Herold would hold the students’ school kit until they either paid the balance they owed or set up a payment plan;

• Herold would hold their transcripts — making them unable to sit for their state boards to become licensed — until the balance was paid in full;

• Herold encouraged students to start the program without having funding in place.

Often, Michael said in the complaint, students would learn after they already started the program that their funding fell short, leaving them with a balance of more than $1,000.

Michael also alleges that Herold told her that part of her business practice was to purposely target low-income Black women to attend the school.

“Ms. Herold admitted that she specifically researched inner-city, low-income areas and advertised in those areas,” the lawsuit said. “Plaintiff repeatedly confronted Ms. Herold regarding her unlawful and discriminatory conduct, and every time she would either ignore plaintiff, or she’d justify her behavior by calling students ‘stupid’ or ‘losers.’”

Silverstri, who has represented Herold and her school for several years, specifically refuted those claims, saying that Herold’s attitude is: “There’s only one race. It’s the human race.”

He said that when Herold opened her school in Squirrel Hill, it attracted many Black students.

“She didn’t know how many Black students would attend,” Silvestri said. “What this school is doing is it is creating economic stability and income in the community.”

The lawsuit also alleges that the school falsified hours in students’ files to make it appear they were progressing in the program to ensure they received more state disbursements and other funding.

It also accuses the school of applying for financial aid in students’ names without their consent or knowledge and creating false invoices.

But Silvestri said those claims are untrue.

“It’s impossible to falsify what they’re saying she did,” he said.

Silvestri said that only students can apply for loans and financial aid.

Further, he said that Herold’s school gets audited regularly by the U.S. Department of Education.

A spokesperson for the Department of Education said on Friday they could not immediately provide any information.