Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Central figure in charter airline kickback scheme sentenced to prison time, ordered to pay restitution, (Sep 13, 2013)
Organizations Mentioned:Aviation Fuel International, Inc. | Ryan International Airlines | U.S. Department of Defense | U.S. Department of Homeland Security
By Jeffrey May, J.D.
A former executive of charter airline Ryan International Airlines was sentenced yesterday to serve 87 months in prison for participating in kickback schemes to defraud the airline (U.S. v. Kepple, Case 9:11-cr-80170-KLR).
Wayne E. Kepple, the former vice president of ground operations for Ryan, is the fourth individual to plead guilty and be sentenced as a result of the Justice Department’s ongoing investigation into anticompetitive conduct in the airline charter services industry. The judgment, which was entered on September 12, also requires Kepple to pay $529,998 in restitution. Upon release from prison, Kepple will be on supervised release for three years.
It has been nearly two years since Kepple was charged with three counts of conspiracy to commit wire fraud and honest services fraud, as well as three counts of wire fraud. 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. Kepple was in charge of contracting with suppliers on behalf of Ryan and approving the invoices submitted by the providers to Ryan for payment.
According to the 2011 charges, Kepple accepted kickback payments from a number of suppliers. Robert A. Riddell, the former owner and operator of an airline security and ground services company, was charged on the same day as Kepple for his role in the kickback scheme. Riddle was sentenced in 2012 to serve 24 months in prison and to pay $131,540 in restitution.
In addition, before the charges were filed against Kepple and Riddle, David A. Chaisson, the former owner and operator of an Indiana flight management services company, and James E. Murphy, the former owner and operator of a Florida aviation fuel supply company, were charged with participating in different conspiracies to defraud Ryan by making kickback payments in exchange for obtaining business. Both were sentenced to serve prison time and ordered to pay restitution.
Earlier this year, a grand jury in the federal district court in West Palm Beach indicted fuel supply service company Aviation Fuel International, Inc., and the company’s former owner, Sean E. Wagner, for making kickback payments to Kepple in order to win contracts with Ryan. That case is ongoing.
“Today’s sentence should serve as a stiff deterrent to executives who might be tempted to solicit a kickback from their supplies in exchange for their honest services,” Bill Baer, Assistant Attorney General in charge of the Antitrust Division, said in a statement announcing the sentencing. “The Antitrust Division is committed to ensuring that contracts are won based on competition and not collusion.”
Companies: Ryan International Airlines; Aviation Fuel International, Inc.
News: Antitrust AntitrustDivisionNews