Did JPMorgan And Citi Screw Taxpayers By Cheating On Student Loans?
Previously sealed court documents show that JPMorgan (JPM) and Citigroup (C) are being sued for conspiring with education finance company Nelnet (NNI) to allegedly receive federal student loan subsidies by making false claims and illegally recruiting more borrowers. The civil action suit was filed in May 2008 at U.S. District court in Omaha, Nebraska and was posted recently on Wikileaks, just before it was officially unsealed by the court. The 285 page suit (below) says Nelnet illegally induced students to apply for federal student loans, paying telemarketers to aggressively push the government product, and used false advertising to get more applications, like promising that students would save thousands of dollars in interest payments by consilidating their loans with Nelnet. They then presented false claims to the Department of Education to receive federal funding. According to the suit, JPMorgan and Citi alledgely “ratified and/or authorized the wrongful acts of Nelnet and have bene
