"No, I don't thank you for the fish at all" (notindetroit)
05/14/2014 at 10:53 • Filed to: Scams, Super Replicas, Flight Training
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"No, I don't thank you for the fish at all" (notindetroit)
05/14/2014 at 10:53 • Filed to: Scams, Super Replicas, Flight Training | 2
| 1 |
Ah, Super Replicas. You have provided many an opportunity to be !!!error: Indecipherable SUB-paragraph formatting!!! for making ridiculous made-up claims that exist only in your head, yet at the same time with at least some apparent skill in pulling the wool over people's eyes. Of course this type of scam isn't new or limited to the world of kit replicas. Back when "the bubble" burst and news headlines were flooded with the latest rounds of arrests made at Wall Street financial firms, a bunch of people figuring they were far more clever than they actually were thought it'd be a neat idea to scam tens of thousands of dollars out of people through what appeared to be a transparent and legitimate path towards helicopter flight training. The end result was parallel to Wall Street's "bubble:" arrests were made, hundreds if not thousands of people permanently lost their money, and a domino effect toppled through the general aviation world just in time to coincide with the rest of the economy collapsing. The allure of easy-scammable money and the false belief some people have of being better scammers than their predecessors make some lessons hard to learn and easy to forget, so helicopter flight training rip-offs are coming back yet again.
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Above image from !!!error: Indecipherable SUB-paragraph formatting!!!
Silver State Helicopters
The "Lehman Brothers of general aviation," Silver State Helicopters (founded in Nevada, hence the name) started innocently enough - yet another rotor-wing flight school like the many that dot America's smaller airports. Ernie Stephens at !!!error: Indecipherable SUB-paragraph formatting!!! tells the whole story: it started going wrong when SSH founder Jerry Airola got the idea that he could out-Ft. Rucker Ft. Rucker, the US Army's central helicopter training center and their equivalent of the USAF's training program at Colorado Springs or the US Navy's aviation center at Pensacola. For whatever reason, he thought he could train helicopter students en masse, at centers in nearly every state and helped along by blasting Dallas and Los Angeles airwaves (two places quite a distance away from Nevada) with commercials, something still otherwise nearly unheard of for a civilian flight training school of any type (as opposed to the aviation mechanics' school ads frequently seen on daytime TV). Moreover, he could promise his students guaranteed employment - if they couldn't find helicopter work outside of SSH, SSH themselves would hire them. All of this would "only" cost prospective students the same as, oh, !!!error: Indecipherable SUB-paragraph formatting!!! . In addition to the "guaranteed" employment, this would be balanced out through loans supplied by - who else - SSH itself, and all it took was a mere $500 initial application fee. The loans would need to be paid either at the conclusion of flight training or after 18 months at a rate of a grand per month; otherwise, students were required to pay the full amount in one-third increments (worth over $20,000 each) every month after flight training began.
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At the very first open-house seminar (Stephens doesn't mention where, but I'd imagine it's one far away from Nevada) SSH employees expected only about 100 prospective students; instead, they were flooded with over 1,000. This gave Airola the bright idea that he had a real money maker on his hands - better start investing in more intercontinental advertising, helicopters and training bases across America and let the people and their money flow in!
You can probably see where this is going - in order to actually fund all those shiny new toys and bases of operation, more students needed to be recruited in order to get their payments. SSH became one of, if not the fastest growing general aviation operator in the country and one of !!!error: Indecipherable SUB-paragraph formatting!!! largest clients. They started expanding at a rate so fast that it was inevitable the bottom would fall out, just as it was 2,000 miles away on Wall Street.
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The appeal of helicopter training is an enticing one - helicopters are the closest thing we have to true "flying cars" capable of landing anywhere there's a spot big enough to physically set the thing down. That alone makes it inherently sexy. Being able to do it for a living makes it a dream come true. Unfortunately, there's a lot of inherent complexity that goes along with that, making helicopter training far more expensive than even fixed-wing training. Furthermore, despite its apparent practicality, helicopters actually aren't that practical. They guzzle gas like nobody's business, aren't terribly fast (a $10 million twin-turbine S-70 Black Hawk can barely outpace a $350,000 Cessna 182 Skylane and its 50s-era Continental flat-six lead-burner) and travel by car or fixed-wing flight is going to be far more economic and practical. This means actual employers with helicopters are far and few between - in fact, the largest operator of helicopters is going to be the federal government by far, namely the military (and with that particular occupation being extremely hazardous and bereft of guaranteed rotor-wing placement, it's still far from an ideal job path - not to mention with their own training program accepting SSH students is going to be an uphill battle). The many yet typically small civilian helicopter operators and businesses that dot the country - from aerial news/police reporting and survey to utility and heavy-lift to VIP shuttle services - are typically able to draw upon the large pool of military helicopter pilots upon their exit from the service, making helicopter pilot jobs extremely competitive. And that's completely ignoring how difficult flying a helicopter actually is - more complex than fixed-wing flying (hence why it tends to be even more expensive) and simply put, not everyone who signs up for helicopter training is actually capable of safe helicopter operation. Imagine compounding that with saturation advertising trying to draw as many people as possible with no regard as to whether or not they have any actual business to be flying anything in the first place. This makes SSH's promise of "guaranteed employment" nearly impossible to keep, and their own buffer of promised employment within themselves only turns it into an unsustainable self-feeding !!!error: Indecipherable SUB-paragraph formatting!!! that starts having an uncomfortable resemblance to a Ponzi scheme.
And that's exactly what SSH students started to accuse when the spectre of job prospects completely disappeared and SSH itself didn't have enough helicopters or bases of operation to hire the increasingly large body of graduates wondering where their next paycheck will come from. Moreover, students who dropped out of the program were saddled with massive unpayable debt even with SSH's own rather bonkers student loan program. One of the oft-cited complaints was that the lack of employment meant no money to pay those debts in the first place - participation in SSH's training program locked students in an uncomfortable chicken-and-egg situation of lacking the paychecks necessary for prospective employment for paychecks. Stephens quotes SSH's own VP of operations, Randy Rowles, as saying "Silver State didn't care about providing the service. Silver State cared about getting paid for the service." SSH sacrificed its other areas of operation such as tourism and charter flight services to provide the helicopters necessary for training - or rather, to shuffle them around to give the appearance that SSH had more helicopters than it had, much like !!!error: Indecipherable SUB-paragraph formatting!!!
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Bad word of mouth soon spread, then turned into legal investigation, then litigation. Shrinking enrollment, lawsuits and other legal action finally took their toll. Airola fancied himself enough spare time during Super Bowl Halftime in 2008 to bother to compose and fire off an e-mail informing his employees that SSH would cease operations and existence altogether. The greatest chapter in General Aviation's own version of the subprime bubble had come to a close.
Rotors of the Rockies/TYJ Global
Not that such a sad conclusion to a sad chapter would stop imitators. At one point, "Rotors of the Rockies" (based in Denver, Colorado - once again, hence the name) was apparently a legitimate flight school and in fact one of the best in the state (a state that features somewhat higher-than-average helicopter pilot employment, thanks to booms in !!!error: Indecipherable SUB-paragraph formatting!!! , US Forestry Service contracts, remote access needs and climate and terrain nearly ideal for safe helicopter training). But at one point, Regina Fyola, RotR's top financial officer, decided it was more profitable to simply outright scam students. With a move from Denver north to Ft. Lupton, RotR changed its name to "TYJ Global" and !!!error: Indecipherable SUB-paragraph formatting!!! started charging students for very large sums (near SSH payment-levels) upfront (never a good sign).
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Students found it nearly impossible to get the services they paid $20,000 for or obtain refunds, and found themselves absent of their money or any actual flight instruction whatsoever. Yet that wasn't scummy enough for Fyola and TYJ Global - they went so far as to establish a non-profit organization called "Return Flight" for disabled students including promises of bespoke prostheses that would permit them to fly helicopters - and all that was needed was the $10,000 needed for these devices (to be paid upfront, naturally). At least one prospective student was left hanging minus his ten grand with no flight training or prosthetic to show for it. The usual flurry of lawsuits have been filed, but unlike the SSH saga, the final chapter's still waiting to be written on this story.
The nature of flight training manages to lend itself quite well to Super Replicas-like scheming: sign up today and you can master a complicated art in no-time that's not only super-cool but gets you equally cool, glamorous and sexy jobs - oh, and did we mention that said jobs are guaranteed upon graduation? The "guaranteed hire" promise is especially alluring and alleviates the worries normally sensible people would have about plonking down multiples of ten grand almost Vegas-style on a whim. Although helicopter piloting jobs are highly competitive, being a pilot for a living is hardly an impossibility - something that will help ensure the longevity of this type of scam. It takes a lot of research to find the truth, and for many people that realization simply comes too late.
Crest
> No, I don't thank you for the fish at all
05/14/2014 at 11:09 |
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Biting off more than they could chew huh. Well now that the lawsuits are in, lets watch the drama unfold