Wednesday, August 17, 2022

Ex-Newport News-Williamsburg Airport director guilty of multiple federal charges

The entrance to Newport News/Williamsburg International Airport in Newport News. (WYDaily file)
The entrance to Newport News/Williamsburg International Airport in Newport News. (WYDaily file)

A federal jury Tuesday found a former Newport News-Williamsburg International Airport executive director guilty on 23 charges of intentional misapplication of funds, money laundering, false declaration, perjury, and obstruction of justice.

According to court records and evidence presented at trial, Kenneth R. Spirito, 47, was the airport’s executive director from 2009-2017.

In 2014, Spirito, of Maryland, led and organized an effort for a start-up airline, People Express Airlines, Inc. to get a $5 million loan from TowneBank that was guaranteed by the Peninsula Airport Commission (PAC), operators of the airport. Spirito intentionally misapplied various state and federally regulated funds to provide the cash collateral for the TowneBank loan, according to the U.S. Attorney’s Office for the Eastern District of Virginia.

When People Express suspended operations in September 2014, the PAC had to make payment on the loan default. Spirito subsequently provided false information to the Federal Aviation Administration regarding the source of the loan payments.

In 2019, Spirito provided false testimony in a civil deposition regarding his role in the decision to do the loan guarantee and the funds he used as collateral, prosecutors said.

Spirito faces 10 to 20 years in prison “across each count of conviction,” prosecutors said.

He is set to be sentenced June 10.

In February, Michael Morisi, 59, of Suffolk, the former president of People Express was sentenced to two years in prison for fraud in connection with the failure of People Express Airlines in 2014 and the filing of a false income tax return.

Federal prosecutors said Morisi led the push to get the airline operational, despite a failed track record of getting private investments and significant outstanding liabilities.

RELATED STORY: Former head of defunct airline goes to prison for fraud in scandal at Newport News-Williamsburg airport

Morisi gave false representations to creditors (including the PAC, which paid more than $4 million to satisfy the TowneBank loan) claiming that no funds were available, according to court documents.

He made large purported back salary payments to himself and other executives in lieu of paying creditors, prosecutors said.

John Mangalonzohttp://wydaily.com
John Mangalonzo (john@localdailymedia.com) is the managing editor of Local Voice Media’s Virginia papers – WYDaily (Williamsburg), Southside Daily (Virginia Beach) and HNNDaily (Hampton-Newport News). Before coming to Local Voice, John was the senior content editor of The Bellingham Herald, a McClatchy newspaper in Washington state. Previously, he served as city editor/content strategist for USA Today Network newsrooms in St. George and Cedar City, Utah. John started his professional journalism career shortly after graduating from Lyceum of The Philippines University in 1990. As a rookie reporter for a national newspaper in Manila that year, John was assigned to cover four of the most dangerous cities in Metro Manila. Later that year, John was transferred to cover the Philippine National Police and Armed Forces of the Philippines. He spent the latter part of 1990 to early 1992 embedded with troopers in the southern Philippines as they fought with communist rebels and Muslim extremists. His U.S. journalism career includes reporting and editing stints for newspapers and other media outlets in New York City, California, Texas, Iowa, Utah, Colorado and Washington state.

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