A Florida-based airline fuel supply company and its former owner and operator were indicted on charges of participating in a scheme to defraud Illinois-based Ryan International Airlines, according to the Department of Justice.
Sean E. Wagner was arrested on 19 July 2013 in Florida on a criminal complaint of wire fraud relating to a scheme to defraud Ryan, a charter airline company. The Department of Justice said then that Wagner was arrested because he was a flight risk. (No pun apparently intended by DOJ.)
A federal grand jury in the U.S. District Court for the Southern District of Florida in West Palm Beach, Florida has now returned an indictment against Wagner and his company Aviation Fuel International, aka AFI (Read AutoInformed on Fuel Company Head Charged in Kickback Scheme)
The indictment alleges that Wagner and AFI participated in a conspiracy to defraud Ryan by making kickback payments to Wayne Kepple, a former vice president of ground operations for Ryan, in exchange for awarding business to AFI. Ryan provided air passenger and cargo services for corporations, private individuals and the U.S. government – including the U.S. Department of Defense and the U.S. Department of Homeland Security.
The indictment alleges, among other things, that from at least as early as December 2005 through at least August 2009, Wagner, AFI and others made kickback payments totaling more than $200,000, in the form of checks, wire transfers, cash and gift cards, to Kepple while working at Ryan.
“The conspirators traded contracts for kickbacks and took affirmative steps to hide their illegal scheme, including wiring payments to personal bank accounts and making secret cash payments,” claims Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
Wagner and AFI are charged with one count of conspiracy to commit wire fraud and honest services fraud, as well as two counts of wire fraud and two counts of mail fraud. Each count carries a maximum sentence of 20 years in prison and a $250,000 criminal fine for individuals and a $500,000 criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum fine.
Because of this ongoing investigation, four individuals have pleaded guilty to date. Three of the individuals have been ordered to serve sentences ranging from 16 to 24 months in prison and to pay more than $220,000 in restitution. The fourth individual, Kepple, pleaded guilty and is currently awaiting sentencing.
