MANHATTAN (CN) – A shareholders derivative lawsuit accuses CIT Group and its directors of running a Ponzi scheme by facilitating tens of millions of dollars in loans to students of Silver State Helicopters, a putative flight school in Las Vegas. This complaint comes two days after a federal class action in San Francisco accused Citibank and The Student Loan Corp. of duping students in what plaintiffs called an enrollment-based Ponzi scheme at Silver State Helicopters.
The defendant directors in New York County Court are Jeffrey Peek, Gary Butler, William Freeman, Susan Lyne, Marianne Miller Parrs, James McDonald, Timothy Ring, John Ryan, Seymour Sternberg, Peter Tobin, Lois Van Deusen, Joseph Leone, and nominal defendant CIT Group.
Here is the Sept. 9 Courthouse News story on the class action in San Francisco.
Students’ Class Action Targets Citibank & Student Loan Corp.
SAN FRANCISCO (CN) – A federal class action accuses Citibank and The Student Loan Corp. of teaming up with operators of private, unlicensed, unregulated sham vocational schools to dupe students into accepting loans that are paid directly to the schools in enrollment-based Ponzi schemes. “When the schools shutter their doors because the scheme collapses, the students are left with no education, no accreditation and no employment prospects but still obligated to repay the loans,” the complaint states.
This lawsuit is brought on behalf of California residents who enrolled in Silver State Helicopters vocational school and borrowed money from Citibank.
Plaintiffs are represented by Kevin Rooney with the Pinnacle Law Group.