mls515
Posts: 2955
Joined: Mon Jun 26, 2000 5:56 am

AccessAir Was Cheated; Lesson For Start-ups

Wed Apr 03, 2002 5:28 pm

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
--------------------------------------------------------------------------------
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.


--------------------------------------------------------------------------------
 
Guest

RE: AccessAir Was Cheated; Lesson For Start-ups

Wed Apr 03, 2002 5:49 pm

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.
 
mls515
Posts: 2955
Joined: Mon Jun 26, 2000 5:56 am

RE: AccessAir Was Cheated; Lesson For Start-ups

Thu Apr 04, 2002 3:46 am


I'm suprised there are shady people like this in the industry.
 
User avatar
OzarkD9S
Posts: 4849
Joined: Tue Oct 23, 2001 2:31 am

RE: AccessAir Was Cheated; Lesson For Start-ups

Thu Apr 04, 2002 6:42 am

How soon you forget Carl Icahn and Frank Lorenzo.
OZARK, We're big on THAT!
 
mls515
Posts: 2955
Joined: Mon Jun 26, 2000 5:56 am

RE: AccessAir Was Cheated; Lesson For Start-ups

Thu Apr 04, 2002 6:57 am


Yea, but could Icahn and Lorenzo have been arrested and indicted? Corperate raiders like them had counterparts in many industries.
 
tt737fo
Posts: 468
Joined: Thu Jun 07, 2001 2:13 am

RE: AccessAir Was Cheated; Lesson For Start-ups

Thu Apr 04, 2002 12:35 pm

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.
 
access-air
Posts: 1576
Joined: Thu Sep 21, 2000 5:30 pm

RE: AccessAir Was Cheated; Lesson For Start-ups

Thu Apr 04, 2002 12:42 pm

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
Remember, Wherever you go, there you are!!!!

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos