The United States has indicted four people for fraud related to aircraft parts transactions. The indictment alleges that an air carrier employee directed aircraft parts transactions to the other defendants in exchange for kickbacks.
According to the indictment, the air carrier employee would text a part number and a “price ceiling” to the other defendants, and then the defendants would know to quote below or at the price ceiling in order to win the business. The indictment alleges that a percentage of the parts sales was paid as a kickback to the air carrier employee.
The government has accused the defendants of conspiracy to commit fraud (in that the air carrier was denied the honest services of its employee) as well as wire fraud (18 U.S.C. 1343) for using wire services to transmit the proceeds of the scheme.
The indictment names four individuals, bu not their companies, as defendants. It is important to remember that an indictment is just the government’s allegations. These factual allegations have not yet been tested against the defendants’ stories, and the actual facts adduced at trial could differ substantially from the facts alleged in the indictment.
Regardless of the facts of this matter, the matter illustrates the importance of having corporate rules that prevent buyers from taking things of substantial value from seller, and corporate rules that prevent sales agents from providing undisclosed gifts or kickbacks to buyers. If you think that a transaction could be characterized as unethical or as unfair, or if you identify any other red flags, then it is always best to consult with an attorney to ensure that the transaction does not violate any laws.
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