BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a lawsuit on Wednesday against a Waltham driving school that allegedly closed its doors after collecting thousands of dollars in fees from students.

Cam's Auto School and Frederick Lovely, the company's owner, allegedly collected the fees despite being aware that the company was in dire financial circumstances and was about to close. According to the complaint, filed in Suffolk Superior Court, Lovely allegedly planned to close the school as early as October 2010. Despite the impending closure, Lovely allegedly continued to sign up hundreds of new students, accepting tuition payments through March.

"We allege that this driving school misled its prospective students and the RMV in order to turn a profit despite the fact they allegedly knew they were in dire financial straits and planned to close," Coakley said. "As a result, hundreds of young students lost money, and were forced to pay even more to complete their driver's education. Our office is seeking restitution and to ensure they cannot scam consumers in the commonwealth again."

The lawsuit alleges that 537 students paid the auto school an approximate total of $175,000 for which they received no services. Cam's allegedly also conducted two sign up sessions at Natick High School during which it enrolled close to 40 new students. Additionally, the lawsuit alleges that in order to boost enrollment in the final weeks before it closed, Cam's offered discounts of $175 off of the $575 tuition fee if the student paid by check or cash.

In addition to the $575 class fee, Cam's allegedly collected fees from its students on behalf of the school districts in which it operated and failed to remit the money to the schools. According to Coakley's lawsuit, Cam's and Lovely provided driving school instruction in the city of Waltham and had contracts since 1993 with local school districts, including Wellesley, Wayland, Needham, Natick and Lexington.

Coakley's office is seeking to prohibit Cam's and Lovely from providing driving instruction in the state. The complaint also seeks restitution for the affected consumers, in addition to penalties, costs and attorney's fees.