N.J. Bank Fraud: Monmouth County Man Pleads Guilty

By ERIC.KIEFER (Patch Staff)

The former CFO and co-founder of a now-defunct South Carolina public charter operator has admitted to using phony documents and inflating revenue figures to defraud a New Jersey bank and other financial institutions out of millions of dollars, authorities stated.

On Wednesday, Robert Keilman, 70, of Marlboro, pleaded guilty to conspiracy to commit wire fraud affecting a financial institution and to commit bank fraud.

According to court documents and statements, Keilman was one of the founding members of Southern Sky Air & Tours, which did business as Myrtle Beach Direct Air & Tours and was commonly referred to as Direct Air, which offered airline services in several New Jersey cities, including Newark.

From January 2010 through September 2011, Keilman was Direct Air’s chief financial officer.

According to the U.S. District Attorney’s Office (New Jersey), U.S. Department of Transportation regulations require charter operators like Direct Air to protect passengers financially by posting a security or by keeping passenger payments for future flights in a designated depository or escrow account with an approved bank.

Pursuant to this regulation, Direct Air set up an escrow account with a bank headquartered in Wayne.

Keilman stated in court that Direct Air and the bank agreed that money in the escrow account for future flights would not be released to the company until after the flights were completed. Additionally, Direct Air would have to submit a request for payment along with summary reports detailing the flights purportedly flown.

Keilman admitted that, from 2010 through September 2011, he conspired with others, including a pair of Direct Air executives identified in court documents as “Executive 1” and “Executive 2,” to engage in a double-dipping scheme.

As part of the scam, the conspirators submitted release requests for passenger payments designated as “membership fees” prior to the completion of the flights, and then after the flights were completed, submitted release requests for the same funds.

According to authorities, Keilman admitted that a group including himself, Executive 1, Executive 2 and others also submitted release requests containing inflated passenger revenue figures, causing the bank to release millions of dollars in revenues for fictitious passengers.

In addition, Keilman stated that he, Executive 1, Executive 2 and others concealed the shortfall in Direct Air’s bank account by sending fraudulent financial statements to creditors.

The conspiracy to commit wire and bank fraud charge to which Keilman pleaded guilty carry a maximum potential penalty of five years in prison and a $250,000 fine, authorities stated.

Sentencing is scheduled for Jan. 6.