Twelve States Reach Settlement With Student Loan Xpress
One of the worst chapters in aero-educational history is about
see a partial resolution in favor of those victimized by the Silver
State Helicopter scam. Officials from California, Florida, Georgia,
Idaho, Illinois, Missouri, Montana, Nevada, Oklahoma, Oregon, Utah
and Washington have reached a legal resolution that will relieve a
number (but not all, not by a long shot) of some $113 million in
load debt accrued for training at one of the dozens of Silver State
helicopter training facilities that dotted the country. Many of
those seeking relief were billed for large fees for training that
they either did not receive, or were not able to complete, after
the sudden failure of the operation in February of 2008.
The total, a $112.7 million agreement involved the above-named
states and Student Loan Xpress, a member of New York-based CIT
Group Inc.
While the amount forgiven each student varies, reports indicate
that an average of 76% of each student's obligations have been
forgiven, on a scale determined by how much training they actually
received... even though many of those that received some
training, have not been able to complete their pursuit of the
necessary ratings and licenses due to the SSH failure...
California Attorney General Jerry Brown noted that, "These
students did not obtain the helicopter instruction they were
promised, yet Student Loan Xpress insisted that they pay off the
full cost of their tuition. Without this agreement, Silver State
flight school students would face a mountain of debt for training
they never received." Other states are pursuing similar actions and
other such agreements and settlements are expected. And as for
Student Loan XPress, a statement on the company website notes that,
"Since 2002, Student Loan Xpress has been proud to offer education
finance solutions to hundreds of thousands of borrowers nationwide.
As of April 3, 2008, are no longer accepting new applications for
any form of federal or private student loan."
ANN was the first news organization to carry the initial reports
of Silver State facilities that locked the doors without warning,
finally advising staff and students that they were shut down and
blaming their plight on banking actions. According to memo from SSH
Founder Jerry Airola, issued on Sunday February 3rd, 2008, "The
Board of Directors has not made a final decision as to Silver State
Helicopters. Because the monthly operating expenses, even at the
recently streamlined levels, continue to exceed cash flow the Board
has elected to suspend all operations effective at 5:00 PM today.
All offices are closed effective immediately and all employees are
terminated as of 5:00PM today as well. All employees will receive a
final payroll check via your normal payment method (check or direct
deposit by ADP)."
ANN noted then that, "Silver State Helicopters was, at
best, a troubled operation. With some 40+ facilities around the US,
it reportedly operated well over 200 helicopters, and employed 850
people. Criticized widely for an aggressive marketing program that
seemed to "oversell" the availability of jobs in the helicopter
industry, it was beset by a number of legal problems as students
and clients reportedly sued with claims that they had been
deceived. A video featuring Airola claims that a, '...Nationwide
shortage of helicopter pilots has opened a way to unlimited
employment in a career that knows no limits.'"
Over the next few months accusations of fraud on the part of
Airola and other associates were rampant and thousands of students
found themselves on the hook for training that they either did not
receive or complete... and even those with some marketable skills
found themselves heading into a market flooded with Silver State
employee/refugees. As for Airola, accused by many of being one of
aviation's most notable con-men, he apparently can look forward to
a number of additional court appearances. He is currently involved
in litigation that suggests that SSH, at his direction, conducted
preferential and illicit transfers of SSH property to other
companies under his or associated control.
Recently, Bankruptcy Trustee (overseeing the CH7 filing of
Silver State) James Lisowski Sr., filed an adversary lawsuit
alleging fraudulent transfers by Airola, former Silver State CFO
Steve Pickett, First American Equity LLC (said to be owned or
controlled by Airola and Pickett) and Stars & Stripes Heliplex
LLC (with ownership tied to Pickett and associate Steve Trenk).
We have little doubt that there is more to learn of all this but
to the students of SSH who were aggressively sold a well-crafted
dream of an adventurous future flying helicopters all over the
world, it was a crushing disappointment when the truth was finally
revealed... and for the rest of us, it certainly was not aviation's
finest hour at a time when aviation really did not need another
black eye...
More info to come (we fear)...
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