They couldn’t get federal aid...(seriously)

That fall day in 2007 seemed an auspicious start for a college with only five professors and 10 students. But as the year wore on, the students, professors, and staff members became convinced that it was a sign of something else entirely: an elaborate facade.

Founders College, in rural South Boston, Va., was pitched as a sort of Great Books college for devotees of Ayn Rand. And while the for-profit college was never accredited, it operated with authorization from Virginia to issue degrees.

At the time the college was approved, it had no official faculty, no facilities, and, it turned out, shaky finances. “I’m stunned that the state would register a place like that,” says Ray Weiss, the onetime enrollment director. “What did we really have going for us when they registered us?”