The Case
Wrongful Prosecution - Wrongful Conviction
My name is Ken Spirito, nearly 30 days after I won a civil lawsuit against the Peninsula Airport Commission in Federal Court in the Eastern District of Virginia, I was arrested on my driveway and wrongly charged with 18 felonies.
Nearly 75 days later, I was then charged with an additional 6 counts of fraud and perjury, making it a total of 24 felony charges. I was then prosecuted, and convicted in March 2020 of 23 felonies consisting of misapplication, money laundering, providing false information during a federal investigation and perjury. The convictions have resulted in a landslide of consequences including a restitution order of $2.5 million. My case was presented to the 4th Circuit of Appeals and two years later (May 31, 2022), upheld 21 of the 22 convictions. A Cert Petition was submitted to the Supreme Court of the United States on September 26, 2022, and denied on January 9, 2023.
The facts of this case will clearly show my innocence and how the Department of Justice (DOJ) created a case and presented a story to the Judge and Jury that was filled with errors and misunderstandings of the airport profession and its practices.
The series of events that took place between January 2017 and March 2020 were centered around the airport board approval of a loan guarantee to help a start-up airline named People Express. The airline defaulted on the loan and multiple payments from the airport to the bank became an unpopular topic with state political leadership, the public and the media. All along this path, all aspects of the loan guarantee were approved by multiple lawyers, the financial institution engaged in the loan, and the airport board. This path was presented and testified by many officials validating the awareness and approval authority directing the transactions to take place.
As you go through this website and its sections, you will be presented with the facts, and you will see that each conviction cannot be supported based on the evidence that exists.
The prosecution accused me of:
- Not having authority to set up collateral accounts with the financial institution
- Using Virginia State Entitlements (SEF) to collateralize the loan without authority
- Using Passenger Facility Charges (PFC) to satisfy the debt obligation of the loan
- Using Airport Revenue improperly from the U.S. Department of Transportation (USDOT) Small Community Air Service Development grant (SCASD)
- Not reporting the use of funds to the public and the Virginia Department of Aviation (DOAV)
- Falsely reporting to the Federal Aviation Administration (FAA) when asked what funds were used to satisfy the debt obligation
- Lying to the Jury about what funds were used to satisfy the debt obligation, how the airport board made its decisions, and that the board did not adopt recommendations I made about the structure of the loan guarantee agreement
Here are some points that you will find very interesting:
- April 11, 2019 (after two-years of civil litigation) I won a settlement of $300,000 from my former employer (PAC) – Newport News Williamsburg International Airport.
- May 13, 2019, nearly 30 days after the settlement, Ken Spirito was indicted
- May 20, 2019, Ken was arrested on his driveway and charged with 18 counts of federal felony misapplication and money laundering.
- September 9, 2019, the prosecution superseded the original indictment and added 6 additional counts of perjury, obstruction of justice and embezzlement totaling 24 felony charges
- February 2020, the trial began
- March 10, 2020, Ken was convicted of 23 federal felonies
- 4th Circuit Federal Judge reversed one conviction during the sentencing hearing
- July 15, 2020, Ken was sentenced to 48 months of probation
- Federal Aviation Administration (FAA) officials testified that no PFCs were ever used to pay off the loan. Yet Ken was convicted of using PFCs to pay the loan off.
- FAA testified that their department does not oversee grants issued by the USDOT Small Community Air Service Development program (SCASD) and did not know Newport News Williamsburg Airport had a SCASD grant. Therefore, even though the FAA agreed revenue was diverted, it was done lawfully under the approval of the USDOT SCASD grant.
- USDOT official testified that airports must use airport revenue up front and then get reimbursed after all grant conditions have been satisfied and approved by their staff. For over two decades, other airports have transacted airport revenue in similar ways and were never criminally prosecuted.
- State officials from the Commonwealth of Virginia testified that the State Entitlement funds (SEF) funds used to pay off the loan were consistent with State policies.
- Officials from the Commonwealth of Virginia testified the loan guarantee was very unpopular with the Secretary of Transportation and the others higher in leadership.
- The loan guarantee was disclosed to the Daily Press in October, 2014
- The loan guarantee was fully disclosed in the airport’s audited financial statements for 4 fiscal years. The details of the loan are cited and explained on multiple pages and distributed to the FAA, municipalities, presented in open session public airport meetings, the media and available to any member of the public who wanted to review the airport’s financial position.
- In early 2017, the Virginia State Legislature passed a bill amending the Division of Aviation (DOAV) policy to prohibit the use of SEFs to subsidize airlines.
- An email sent to the FAA on February 1, 2017, answering questions (investigation) from an FAA official was 100% truthful and supported by multiple pieces of physical and testimonial evidence. PFCs were NEVER used, SEF usage was allowed by State policy, and the airport used its revenue to front a grant allowance from the USDOT. Yet I was convicted of falsifying information during a federal investigation.
- Video and other evidence will clearly show that I did not commit perjury. Again, no PFCs were used, and airport revenue was used under the USDOT SCASD grant allowance.
- The convictions were appealed to the 4th Circuit Federal Court of Appeals located in Richmond, VA. They upheld 22 of the 23 convictions. The convictions were also presented to the US Supreme Court and was denied consideration.
- The lives of Ken and his family were ripped away and unjustly damaged physically, emotionally, professionally, and financially.