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Former flight management firm owner pleads guilty to fraud

August 15, 2011

The former owner and operator of an Indianapolis-based flight management services company pleaded guilty on Friday to charges of defrauding a charter airline in Rockford, Ill.

David A. Chaisson is one of two men charged in separate schemes to defraud Ryan International Airlines. James E. Murphy, the former owner and operator of a Florida aviation fuel supply company, also pleaded guilty to similar charges.

Prosecutors say the schemes involved kickback payments in exchange for business.

From January 2005 to July 2008, Chaisson paid a Ryan official more than $60,000 in kickbacks, including payments based on fabricated invoices submitted by Chaisson’s company to Ryan, according to court documents. Chaisson’s company was responsible for managing the ground operations for Ryan flights.

During the same years, Murphy paid more than $130,000 in kickbacks to the same Ryan official, who was responsible for procuring jet fuel for Ryan flights. In exchange, the Ryan official provided aviation fuel contracts to Murphy’s company and two other aviation fuel-supply companies where Murphy worked as a corporate bookkeeper, according to court documents.

Ryan International Airlines provides air passenger and cargo services for corporations, private individuals, professional sports teams and the U.S. government.

Both Chaisson and Murphy were charged in July with once count of conspiracy to commit wire fraud and honest services fraud, as well as one count of wire fraud. Each count carries a maximum sentence of 20 years in prison and a $250,000 fine.
 
The charges were filed in South Florida federal court. They are the first to arise from the Department of Justice’s ongoing investigation into fraud and anticompetitive behavior in the airline charter services industry.

 

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