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REPUBLIC AIR, TWO FIRMS CHARGED IN DIVERSION OF FUNDS PAID FOR AIR CHARTER TRIPS, DOT SAYS

 WASHINGTON, Nov. 1 /PRNewswire/ -- Two air charter operators and an air carrier were accused of serious violations of public charter regulations dealing with the diversion of consumer funds for illegal uses, the Department of Transportation (DOT) announced today.
 In an enforcement complaint, the DOT General Counsel's office charged Republic Air Travel, Irving, Texas, and Airlift Group Inc., Miami, which established and ran the charter program, and Express One International, which operates the charter flights, with numerous violations. The complaint also names key officials of Airlift and Republic.
 The complaint alleges that Republic Air, either jointly with Airlift Group, or acting alone, diverted hundreds of thousands of dollars paid by consumers away from escrow account protection and used the funds to pay its expenses including advertising costs, legal fees and employee salaries. Airlift is charged with participating in the scheme or permitting Republic, as its agent, to engage in the violations.
 Express One is charged with breaching its responsibility to ensure that the charter rules are complied with in any program in which it participates.
 The complaint by DOT's Aviation Enforcement Office seeks an order requiring each company to cease and desist from further violations and preventing key officials of Republic Air and Airlift Group from future involvement with any air carrier or public charter operations. The department is also seeking civil penalties of more than $1 million for the violations.
 Between May and September of this year, the complaint says that Republic used funds that should have gone into escrow accounts to pay expenses, including $800,000 for advertising, $69,000 for legal fees, $86,000 in checks to itself or its officers, as well as paying employee salaries.
 Federal rules require that money collected from consumers for charter trips be held in escrow accounts until after the trips have been completed. In addition, charter flights may not be canceled less than 10 days before departure. Consumers are entitled to full refunds at any time except as limited by a signed contract and the DOT charter rules.
 In May and June 1993, Airlift filed prospectuses with DOT seeking authority to sell charter trips. Republic operates a reservations center for the charters and advertises in large markets including Los Angeles, Dallas-Ft. Worth, New York City, Baltimore-Washington and South Florida. It has sold charter trips to thousands of consumers, collecting millions of dollars.
 The complaint also accuses Republic and Airlift of failure to obtain signed contracts from participants before accepting payment, failing to make refunds promptly, unlawfully canceling flights within 10 days of departure and failure to give consumers timely notification of cancellations.
 The complaint names Scot Spencer as the official in control of Republic and Richard Bernard as president of Airlift.
 In 1991, the department requested that Spencer not be involved in the management of Braniff Airlines because of concerns regarding his disposition to comply with federal laws.
 -0- 11/1/93
 /CONTACT: Ed O'Hara of the U.S. Department of Transportation, 202-366-5571/


CO: U.S. Department of Transportation; Republic Air Travel; Airlift
 Group Inc.; Express One International ST: District of Columbia, Texas IN: AIR SU: EXE


KD-IH -- DC995 -- 9315 11/01/93 16:42 EST
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Publication:PR Newswire
Date:Nov 1, 1993
Words:525
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