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AccessAir Was Cheated; Lesson For Start-ups  
User currently offlineMls515 From United States of America, joined Jun 2000, 3076 posts, RR: 9
Posted (12 years 2 weeks 5 days 11 hours ago) and read 1888 times:

One more thing the defunct airline could have done without:


http://www.dmregister.com/news/stories/c4788993/17795974.html


2 charged with cheating AccessAir
By LEE ROOD
Register Staff Writer
04/03/2002
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Two Florida men face federal charges for allegedly swindling AccessAir, the defunct airline Des Moines civic leaders started in 1999 in an effort to save Iowans money.

"It's about time," said Rich Musal, former president of the airline. "I'm sure it would help the bankruptcy estate if authorities could get some of the money back."

Musal said airline officials complained almost four years ago that Irving Oestreich and James Killgo III, former heads of Interjet Leasing Corp., defrauded the airline of nearly $400,000 before its rocky startup. It wasn't until AccessAir entered bankruptcy proceedings in 2000 that the case was taken seriously, he said.

Oestreich, 76, and Killgo, 55, were arrested Monday in Florida on suspicion of conspiracy, money-laundering and wire fraud, said Al Overbaugh, spokesman for U.S. Attorney Steve Colloton. The case was investigated by the FBI in Des Moines.

According to an eight-count indictment, the two men promised to obtain leases for two Boeing 737 aircraft needed before AccessAir could take flight. Instead, they allegedly cashed the $400,000 in deposit money and made small deposits into accounts in the Bahamas.

Musal alleged the two men made similar claims to other airline companies. Overbaugh said his office would not comment on those allegations.

The ill-fated airline's early losses to Interjet, which filed for bankruptcy in 1998, were the first of many.

The airline fulfilled its promise to provide low-priced, direct flights to both coasts, but lost more than $40 million after just two years.

Musal said he and other Access- Air officials met Oestreich and Killgo through a Florida Aviation broker who helped negotiate the lease deal. The company eventually obtained the two planes without Interjet's assistance.

Oestreich and Killgo were scheduled to appear today for a detention hearing. They face up to 20 years in prison if convicted.

A trial date had not been set.


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6 replies: All unread, jump to last
 
User currently offlineSAS23 From , joined Dec 1969, posts, RR:
Reply 1, posted (12 years 2 weeks 5 days 11 hours ago) and read 1843 times:

I have dealt with these people in the past, and a more dubious pair you could not wish to meet! Killgo, as the Chief Financial Officer of a company called Tropical International Airways defrauded the government of St Kitts & Nevis, amongst others.

A company I worked with was approaced by them for the lease of aircraft. We asked for detailed financials - a perfectly normal thing in business. Their response, received from Killgo, was:

Our financials are for stockholder only.

All I can tell you is that each stockholder contributes
capital to the company as need in proportion to the percentage of shares they own. Up to now there has been in excess of $2,000,000.00 of capital contributed to the company.

The Rahael family are the major owners of the company.
As you must know they have enormous financial ability.
George is a member of the Board of Directors of Republic
Security Bank, another brother is the mayor of Port of
Spain.

Another stockholder, Steven Richards is a member of the
Wall Street investment firm, Grady & Hatch.

We have no long range projections, either. Projections are for dreamers. We deal in realities, that being our market is real and we have a better route authority than that of ex PanAm, which American paid $100M USD to purchase from the PanAm bankruptcy trustee.

If I might assist you in other ways please do not hesitate to call on us.


Needless to say, we declined to deal any further with them after that!

These people are simply crooks - who have at last received their come-uppance.


User currently offlineMls515 From United States of America, joined Jun 2000, 3076 posts, RR: 9
Reply 2, posted (12 years 2 weeks 5 days 1 hour ago) and read 1787 times:


I'm suprised there are shady people like this in the industry.


User currently offlineOzarkD9S From United States of America, joined Oct 2001, 4878 posts, RR: 22
Reply 3, posted (12 years 2 weeks 4 days 22 hours ago) and read 1735 times:

How soon you forget Carl Icahn and Frank Lorenzo.


Next Up: STL-TPA-BWI-PWM-BWI-STL
User currently offlineMls515 From United States of America, joined Jun 2000, 3076 posts, RR: 9
Reply 4, posted (12 years 2 weeks 4 days 22 hours ago) and read 1716 times:


Yea, but could Icahn and Lorenzo have been arrested and indicted? Corperate raiders like them had counterparts in many industries.


User currently offlineTT737FO From United States of America, joined Jun 2001, 472 posts, RR: 9
Reply 5, posted (12 years 2 weeks 4 days 16 hours ago) and read 1682 times:

You know what? I read this and think how could anyone be so frigging stupid.

Interjet Leasing
Tropical International Airlines????
St Kitts??

Doesn't anyone do research and background checks anymore? (Oh wait, there's Enron).

Anybody that knows anything about finance, knows that the lending or venture capital company must disclose its financial well being. Of course there is always Arthur Andersen to cook the books.

I guess the lesson learned is that upstart airlines are pretty desperate to get their feet off of the ground. If it looks too good to be true it probably is. Lucky for Access it was only 400k.


User currently offlineAccess-Air From United States of America, joined Sep 2000, 1939 posts, RR: 14
Reply 6, posted (12 years 2 weeks 4 days 16 hours ago) and read 1680 times:

I worked for AccessAir and Ill haev to pas this one on to my former Access buddies im sure they would be plenty interestd in this bit!!!

Access-Air



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