The founder of PEOPLExpress (V2, Newport News), Michael Morisi, was sentenced on February 20 to two years in prison for fraud in connection with the failure of his airline in 2014 and for filing a false income tax return, the Williamsburg Yorktown Daily reported citing court papers.

As previously reported, the US Internal Revenue Service arrested Morisi, 59, on May 21, 2019, and charged him with five counts of wire fraud, eight counts of spending money obtained by fraud, three counts of filing a false income tax return, and two counts of failing to file a tax return concerning his management of the failed start-up, which suspended operations in September 2014.

He pleaded guilty in July to wire fraud and filing a false federal income tax return and faced a maximum of 23 years on the two charges, according to the Williamsburg Yorktown Daily.

Prosecutors recounted that Morisi had led the push to launch operations, obtaining a USD5 million loan in June 2014 from Portsmouth-based TowneBank - a loan that was guaranteed by Newport News-Williamsburg Airport operator the Peninsula Airport Commission.

The virtual carrier operated for about three months before suspending service, after which various creditors sought repayment. But Morisi opened new bank accounts to receive insurance proceeds, avoid the seizure of funds, and dodge state taxes, the prosecutors said. He also filed false tax returns for three years and failed to file returns for a further two years.

Also, Morisi falsely claimed to creditors - such as the Peninsula Airport Commission, which had to pay around USD4.5 million back to TowneBank - that funds were no longer available. Yet he allegedly made large back-salary payments to himself and other executives, according to the court documents.

PEOPLExpress chartered a B737-300 and a B737-400 from Vision Airlines (United States of America) (V2, Las Vegas McCarran) on flights from Newport News to Atlanta Hartsfield Jackson, Boston, New Orleans Int'l, New York Newark, Pittsburgh Int'l, St. Petersburg/Clearwater, and West Palm Beach Int'l.

Editorial Comment: Added details of B737 operator. - 26.02.2020 - 13:09 UTC