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Tue, Mar 26, 2024

Defendants Accept $700k Penalty for

Case Closed for Charter Operator who Sidestepped Dry Lease Regs

The Campbell Oil Company, Executive Aircraft Services, and two personnel have agreed to pay the DOJ a $700,000 fine to clear up the allegations of illegal charter flights, which were cited in a complaint filed last year.

The fine was agreed to be paid by the two aforementioned companies and two people, Brian Campbell, and David Stephens. The allegations said that entities had, in collected form, operated more than 150 passenger-carrying revenue flights under a 'sham' dry lease agreement that were, in actuality, essentially wet leases. Under such deals, Executive Aircraft services and Campbell Oil would collude to offer an aircraft under a usual dry lease and provide pilots and crew in a turnkey fashion from a pool of known friendlies and pilots.

In the DOJ's brief closing the case, they described the scheme thusly: "However, the leases were, in substance, wet leases because Campbell Oil and EAS, through their President Brian Campbell, allegedly made the aircraft available to their customers in conjunction with pilot services offered by David Stephens and other pilots with whom Defendants had relationships, all without complying with the heightened safety and certification standards mandated by law for wet leases and commercial operators. Defendants allegedly also held themselves out to the public as offering air charter services, including by paying commissions to Stephens for soliciting customers for the air charter business."

As anyone in the game knows, the FAA is quite sensitive at sniffing out that kind of activity, since they see it as a way to sidestep the safety and certification requirements needed to operate under a proper charter flight. The defendants no longer operate the aircraft leasing business on either side, and have agreed to settle the allegations with the $700,000 civil penalty.

FMI: www.justice.gov

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