When Craig Biswell signed up at the formerly Bend-based Desert Sun Helicopter Academy in May 2007, he was ready to fulfill his dream of becoming a professional pilot.
But Biswell, 42, still doesn't have his pilot's license and has instead declared bankruptcy after he was left with $60,000 in student loan debt when the school closed suddenly in June 2008.
Biswell is one of a group of former Desert Sun Helicopter Academy students who say that, when the academy shut down, they were responsible for thousands — and, in some cases, tens of thousands — in student loan debt.
The academy's founders, Tyler Fitzsimons, 31, and Shannon Egeland, 35, are under federal indictment for allegedly defrauding banks and commercial lenders out of $19 million. The indictments say they operated commercial and residential mortgage schemes through the now-defunct Desert Sun Development construction company that included lying on loan forms and failing to construct buildings for which they were given loans.
The company is the subject of nearly 50 lawsuits filed by private individuals, businesses and banks claiming they either provided Desert Sun with services or financing and were never compensated. Some of those suits name the helicopter academy as well, claiming it did not pay its bills.
None of the federal criminal charges involve activities relating to Desert Sun Helicopter Academy.
Fitzsimons could not be reached at his listed telephone numbers, and Egeland's phone number is not published. Both men pleaded not guilty in a Eugene federal court earlier this month.
Biswell and other former students of Desert Sun Helicopter do not know for certain what happened to the academy, but they suspect it was run into the ground when student loan money sent directly to the school was diverted to Desert Sun Development.
“We all knew the money was getting tight, and the fall of Desert Sun Helicopters was all due to the construction company,” said Sean Charlton, who was both a student and a flight instructor at Desert Sun Helicopter. “To my understanding, they took the money from the flight school to keep the construction company above water.”
Charlton, 30, and the other students interviewed said the training they got at the helicopter academy, under chief flight instructor Joel Jenson, was excellent.
“The school was run by one person who really knew what he was doing. That was Joel,” said Charlton, of Bend.
Biswell, Charlton and other students said they financed their training through the private loan company SLM Corporation, more commonly known as Sallie Mae, which gives federal and private student loans for college and graduate students, according to its Web site.
The loan money was sent directly to the academy, but each of the students signed a personal promissory note to repay them, they said.
Media representatives from Sallie Mae could not be reached for comment Wednesday or Thursday.
Sallie Mae documents and court records show the company sent money to Desert Sun Helicopter even though the school was not an “eligible education institution,” under federal law, meaning it was not accredited by the U.S. Department of Education.
“What is really unsettling about this case is that, in making these loans, they were propping up what turned out to be a very shady enterprise,” said Bend lawyer Jim Forbes, who represents Biswell and former Desert Sun Helicopter Academy student Ryan Christensen. “It's clear to me that Sallie Mae did not do their due diligence in finding out what Desert Sun Helicopter Academy was all about.”
Forbes got Biswell's debt and the nearly $83,000 in student loans issued to Desert Sun Helicopter Academy on Christensen's behalf discharged in federal bankruptcy court.
“We filed a lawsuit saying, ‘Hey Judge, Desert Sun was not accredited,'” Forbes said, which meant the loans could be discharged in a bankruptcy proceeding.
But even after Biswell's debt was discharged, letters from Sallie Mae show the institution continued to demand payment from him. “They said, ‘You got some training, you owe us money,'” Biswell said. “They were calling me on Saturdays, Sundays. They were just ruthless.”
Before Biswell's bankruptcy was final, Sallie Mae did offer to forgive more than $27,000 of his debt in exchange for his signature on a document promising not to sue Sallie Mae, but Forbes advised him not to sign it.
Charlton and former Desert Sun Helicopter Academy student Matthew Brantner said they had a different experience with Sallie Mae, which forgave the majority of their loans.
“They put my loan on hold,” Brantner said. “They basically said, ‘We are hoping that the school is going to return the money that hasn't been spent.' Then I find out that they don't have the money, and I was wondering where they spent it.”
Brantner said he agreed to pay back $7,000 of the $45,000 in loans Sallie Mae sent to Desert Sun Helicopter Academy.
“I am on the hook for the money that I did spend through the flight school program because that was for the training I received, because I did do the flight training and the helicopter hours,” Brantner said. “I have no qualms with paying back the money I spent.”
Both Charlton and Brantner have finished their training and now have their pilots' licenses.
But Biswell, who is unemployed, says he is struggling to find a way to finance the remainder of his training at Central Oregon Community College.
“I had $60,000 sitting there. I should have been done a year and a half ago,” he said. “And now my credit is shot, and it's just frustrating as all get-out that I can't (get my pilot's license) because of other people's greed and stupidity.”