Antitrust Law Daily Wrap Up, ANTITRUST—S.D. Fla.: Sentence reduced for former airline service company owner involved in kickback scheme, (Feb 9, 2015)

By Jeffrey May, J.D.

The federal district court in West Palm Beach, Florida, has reduced the sentence of Sean E. Wagner, the former owner/operator of Florida-based airline fuel supply service company Aviation Fuel International Inc. (AFI). In May 2015, Wagner was sentenced to serve 50 months in prison and ordered to pay restitution after pleading guilty to defrauding Illinois-based Ryan International Airlines—a charter airline company. The prison sentence has been reduced to 40 months (U.S. v. Wagner, February 4, 2015, Hurley, D.).

The government had moved for the sentencing reduction in December 2014 in recognition of Wagner's substantial assistance in an investigation into fraud and anticompetitive conduct in the airline charter services industry. The Department of Justice has been investigating efforts to defraud Ryan International, which has provided air passenger and cargo services for corporations, private individuals, professional sports teams, and the U.S. government. The U.S. Department of Defense, the U.S. Department of Homeland Security, and the U.S. Marshals Service have used Ryan International's services.

A grand jury returned a five-count indictment in 2013 against Wagner and AFI for conspiring to make kickback payments to a former vice president of ground operations for Ryan International. In exchange, the Ryan International employee awarded contracts to AFI and another company controlled by Wagner for fuel supply services, according to the government. Between December 2005 and August 2009, Wagner, AFI, and others made more than $200,000 in kickback payments to the Ryan International employee, the government alleged. The conspirators also allegedly agreed to inflate the price of fuel and equipment sold to Ryan and to split the proceeds between them.

The charges against AFI were dismissed in February 2014. In March 2014, Wagner pleaded guilty to one count of conspiracy to commit honest services wire fraud. In May 2014, Wagner was sentenced to 50 months’ imprisonment and to a two-year term of supervised release. Wagner also was ordered to pay restitution in the amount of $202,856.

Based upon the Wagner's pre-sentencing and post-sentencing cooperation, the government asked that the court to reduce his sentence to 40 months’ imprisonment pursuant to Rule 35 of the Federal Rules of Criminal Procedure. There was no change to the supervised release and restitution terms. The agreed-upon sentencing range had been 37 to 57 months’ imprisonment. According to the Justice Department, Wagner was interviewed and debriefed several times. In addition, Wagner voluntarily produced thousands of records and documents to the government at his own expense.

This is Case 9:13-cr-80162-DTKH.

Attorneys: Richard A. Hellings, Jr. for Department of Justice Antitrust Division. James R. Gailey (James R. Gailey, Attorney at Law) for Sean E. Wagner.

Companies: Ryan International Airlines; Aviation Fuel International Inc.

Cases: Antitrust AntitrustDivisionNews FloridaNews