A federal jury in New Jersey has found two executives at a defunct Myrtle Beach-based charter airline guilty of fraud
The Justice Department announced Thursday that 73-year-old Judy Tull and 58-year-old Kay Ellison were convicted of various wire and bank fraud charges. Tull is the former CEO of Direct Air and Tours, which suspended its services and filed for bankruptcy in 2012. Ellison is the former vice president and managing partner. The airline’s former chief financial officer 73-year-old Robert Keilman previously pleaded guilty.
“Judy Tull and Kay Ellison stole passengers’ money to try and prop up their failing company,” Acting Assistant Attorney General John Cronan said in a statement. “Their brazen scheme created a multimillion dollar shortfall that left passengers stranded at airports, and banks and credit card companies scrambling to pick up the pieces.”
Federal prosecutors accused the pair of stealing money from an escrow account that passengers used to place money for future travel with Direct Air. The U.S. Attorney’s Office said Ellison and Tull would artificially inflate the amount of money they were entitled to receive, and submitting the false amount to the bank so the bank would then release that escrow money. Both women were also accused of covering up their actions with fake profit and loss statements to hide the fact the airline was losing money.
The Justice Department said the company ultimately lost $30 million in refunds to thousands of stranded passengers.
The two women are scheduled to be sentenced in July. Keilman will also be sentenced at a later date.
Both women are from North Carolina, while Keilman is from New Jersey.