The BPPE was formed because California was the world capital of diploma-mills in the 80's. It falls under consumer protection, similar to how California has a special bureau that punishes scummy "extended warranty" companies.
The reason you register is so the state can periodically check your marketing material and field students complaints. For example, Lambda School lied about how many students get jobs, and it would have been real nice for the agency to have stepped in before the lawsuits, which are still in litigation.
It's not about the importance of the act of filing paperwork, it's the fraud of lying to customers that you are following the law and then taking their money. For what it's worth, I don't think prison would help. But maybe some non-dischargable liabilities and a ban from being a corporate officer would.
If you were actually to commit fraud regulators can come for you whether you register or not. The act of registration is simply to make it easier to tell regulators what is happening.
This is fundamentally not what happened and a prison term for this would be insane (even California's BPPE would agree with that).
Our counsel told us we didn't need to register with the BPPE because we weren't offering in-person classes (this was somewhat rare back in 2017 - certainly more rare than now). The BPPE sent us a letter that said we needed to register and we did so and began working with the BPPE instantly. We never ever lied about that fact, and there was no attempt to avoid regulation in any way.
Ah yes, prison for trying to teach something useful across a zillion regulatory domains, sinecures for administrators at “real” universities while students rack up piles of debt for English degrees.
No, that is not true. We never claimed to have an audited report until we actually had an audited report.
I asked if there was an auditor who would verify them after the fact to show that they were accurate, but we had had never claimed they were audited at that point.
Unfortunately auditors doing that is a months-long process, so we could only have them audit subsequent reports (which they have done).
I really think that the law should be changed so that doing stuff like that would have been a prison term for the CEO (Allred).