All three Direct Air executives found guilty in a federal trial have now been sentenced.
The sentencing comes seven years after the air travel company abruptly cancelled all flights, including at the Punta Gorda Airport.
The most recent sentencing was in January when former Chief Executive Officer Judy Tull, 72, was sentenced to 94 months in prison and ordered to pay $19.6 million in restitution, according to statements from the U.S. Department of Justice. Former Vice President Kay Ellison, 58, was sentenced in November, also to 94 months and the same restitution. DOJ announced Tull’s sentencing at the end of January, although she was sentenced on Jan. 11.
Both women are Edenton, South Carolina natives.
A third executive, former Chief Financial Officer Robert Keilmann of New Jersey was sentenced in November to 60 months and only up to 5 percent of the restitution. He had pleaded guilty in 2015 and cooperated with federal investigators during the investigation, according to the DOJ.
“Their brazen scheme created a multi-million dollar shortfall that left passengers stranded at airports, and banks and credit card companies scrambling to pick up the pieces,” Acting Assistant Attorney General John Cronan said in a post-trial statement issued by the DOJ.
DOJ reports state that Direct Air executives were all found guilty of submitting false documents to a New Jersey bank, allowing the travel company to withdraw money that would-be travelers had paid for tickets on flights not yet flown. Federal law bars airlines from using escrow accounts with ticket money before the flight. The executives also submitted falsified profit and loss statements to credit card companies to persuade the companies to keep working with Direct Air when its finances were failing.
Court documents show that Direct Air tried to call itself a travel agency rather than an airline, to explain its end-run around the banks. It chartered planes for vacationers. Unlike Allegiant Travel Company — currently the only major commercial airline serving Punta Gorda Airport — Direct Air did not own any planes. Both airlines operated at Punta Gorda at one point, according to Punta Gorda Airport records. Allegiant’s passenger volume in Punta Gorda soared after Direct Air went under, far surpassing Direct Air operations.
Punta Gorda Airport Authority Commissioner Pam Seay has said local officials did not know what was happening with Direct Air up until the day the airline cancelled all its flights. The airline promised to reopen, but federal regulators informed the public that the airline would not be reopening and that its escrow funds were being investigated.
The convictions are part of the government’s pursuit of white collar criminals, according to DOJ statements. Legal blogs have noted an increase in imprisonment in white collar executives rather than the practice of imposing steep fines on large companies.
The former executives face large restitution bills. Tull applied for a court-appointed lawyer due to her inability to afford her legal defense, according to the Myrtle Beach Sun News.
Seay still credits Direct Air with introducing the vacation model of commercial travel to Punta Gorda Airport that Allegiant has continued.