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An update tonight on an exclusive Eyewitness News investigation of a johnston school of cosmotology.. Last spring - we reported the Rhode Island beauty academy was in trouble with the IRS and the state office of higher education.

We've now learned the state has shut down the school. The bad news is the lives of 171 students were disrupted. The good news is that we're told all students who wanted to continue with their studies were transfered to other beauty schools at no additional cost.

This was the rhode island beauty academy when we did our intial report last year.... Despite the liens placed against the facility by the irs and the monitoring by the state office of higher education, the school was still operating.

But this is the beauty academy now....closed and empty. The school, which had operated for about 10 years, was ordered shut down in December.

Warner said the school lost its accrediation, no longer qualified for federal financial aid and the school also lost the $100,000 bond required by the state.

"Once the bond was lost, we realized it put some students at in potential jeopardy and we want to protect them and their intertests."

Two other beauty schools - Arthur Angelo School of Cosmotology and the Warwick Academy of beauty culture - agreed to take the 171 displaced students at no extra cost to the students. One problem did arise.

 The transcripts of 95 students were not turned over by the former owner of the rhode island beauty academy. The state intends to get those records.

"To ensure that, we have a court date set to ensure that we get those."

 We are aware of one young woman who graduated from the school, passed the state-required tests, but could not get a license to work as a manicurist because the school refused to turn over her transcripts. She has now been promised by the state that she will get those transcripts. Wiliam defusco , the former owner of the school, could not be reached for comment.