MYRTLE BEACH, SC (WBTW) – A federal indictment handed down in December 2015 claims the co-founders of a former Myrtle Beach airline stole millions of dollars’ that people paid for future travel.
Myrtle Beach Direct Air & Tours left passengers stranded when it suddenly shut down in March 2012.
At the time, people had tens of thousands of tickets for future travel. The money for those tickets, over $30 million, was supposed to be in an escrow account. Investigators only found $1 million.
The account held money until Direct Air completed flights, an arrangement required under federal law to protect passengers. The company had to send “requests for payment” to the bank and include a summary of the flights and the people flown.
The indictment alleges Judy Tull, Kay Ellison, and others, faked the documents and created “ghost” reservations, which allowed the company to collect millions for passengers who didn’t actually exist. Prosecutors also claim the defendants “double dipped” by submitting requests for some fees twice.
The government says Tull, Ellison, and others, covered up the scheme by creating fake financial statements.
Tull and Ellison are each charged with one count of conspiring to commit wire fraud and bank fraud, seven counts of wire fraud and seven counts of bank fraud. Each count of the indictment is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine.
Records show Tull and Ellison pleaded not guilty to all charges.
Another co-founder, Robert Keilman, pleaded guilty in September 2015 to a conspiracy to commit wire and bank fraud charge. He faces up to five years in prison and a $250,000 fine.
