"Another whistleblower's lawsuit filed against Nelnet accuses the Lincoln-based student loan company of conspiring with banking giants Citigroup and JPMorgan Chase to get as much money from federal student loan programs as they could by misleading borrowers and offering inducements that violated federal rules. Nelnet spokesman Ben Kiser called the lawsuit frivolous," the Lincoln Journal Star reports. "Originally filed in 2007, the lawsuit was unsealed last week in U.S. District Court in Omaha, after the federal government chose not to intervene on its own behalf in the case. That means the filer, former Nelnet employee Rudy Vigil, is suing on his own to get triple damages as a whistleblower for himself and the government. ... Vigil's lawsuit says Nelnet, acting on behalf of Citigroup and JPMorgan Chase, applied for federal interest-rate subsidies, student-loan default claims and "special allowance payments" for those lenders. By doing so, the lawsuit says, the three businesses violated federal law by falsely representing that Nelnet had not offered illegal inducements to encourage people to apply for loans, or by advertising falsely."

You can read the complete Oct. 19, 2009 Lincoln Journal Star article on-line.

Additional Media Coverage

Did JPMorgan And Citi Screw Taxpayers By Cheating On Student Loans? The Business Insider

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