The owner of an aircraft leasing company, who was indicted earlier this year on commercial bribery charges, his corporation, and five new individual defendants are facing an expanded federal indictment alleging that they engaged in a fraudulent financing scheme that raised more than $50 million. Several defendants, including one additional defendant not charged in the fraud scheme, were charged with obstructing a Securities and Exchange Commission (SEC) lawsuit against the leasing company and its owner based on the allegedly fraudulent aircraft investment deals.
In all, seven individuals and a corporation were charged in a 21-count superseding indictment returned today by a federal grand jury. An eighth man, who is cooperating with the government, pleaded guilty last month to fraud and tax evasion, admitting that he accepted more than $400,000 in bribes as part of the scheme.
Typically, when someone is cooperating with government officials, that individual is providing information to the government in regards to the alleged scheme in order to get a plea arrangement or reduced sentence. Under this cooperation, the individual usually must provide all the information he knows regarding the alleged scheme. This usually results in the investigation and indictment of others based on the individuals’ information about the alleged scheme and those involved.
Brian Hollnagel, 37, of Chicago, the owner, president and chief executive officer of the defendant corporation, BCI Aircraft Leasing, Inc., was charged with 12 counts of wire fraud, two counts each of tax fraud and obstruction of the SEC lawsuit, and one count of bribery. Hollnagel has remained free on a $1.7 million secured bond since he was arrested last March on one count of wire fraud in connection with the commercial bribery scheme alone.
BCI Aircraft Leasing, Inc., which buys, sells and leases commercial airplanes and operated first in Naperville and later Chicago, was charged with 11 counts of wire fraud, two counts of obstructing the SEC lawsuit, and one count of bribery.
A corporation may be indicted for alleged illegal behavior, even though technically it is not a “person.” The law is clear that a corporation may be held accountable for alleged illegal acts, in addition to those individuals running the company.
Several others were indicted as well, including: Craig Papayanis, 49, of Moorpark, Calif., who held various positions at BCI, including managing director and chief financial officer, who was charged with six counts of wire fraud; Jason R. Hyatt, 37, of Winfield, Ill., an owner of Hyatt Johnson Capital, LLC., an investment company that offered and sold to its customers investments totaling more than $20 million in BCI aircraft financing deals; two counts of wire fraud and one count of obstructing the SEC lawsuit; William Hatamyar, 55, of Edmond, Okla., president of AirBanker, a division of Chicago-based Bridgeview Bank Group, where he acted as the loan officer on bank loans and a credit line to BCI totaling more than $30 million; two counts of wire fraud, and one count each of false statements to a financial institution and bribery; Jeffrey Meyer, 52, formerly of suburban Lake Zurich, who was BCI’s controller from 2003 to 2006; two counts of wire fraud; Martin Collier, 64, of Chicago and Woodland Hills, Calif., who was the chief financial officer, among other positions, at BCI; two counts of wire fraud and one count each of obstructing the SEC lawsuit and perjury; and Robert Carlsson, 41, of Chicago, a licensed securities broker who raised money for BCI from outside investors; At various times, he was a managing director for BCI, was chief executive officer of BCI Capital Management, and owned 21 Capital Group, Inc., a registered securities broker-dealer; two counts of obstructing two separate SEC examinations of him and his company, 21 Capital Group.
According to the indictment, beginning no later than early 2000 and continuing through at least early 2009, Hollnagel, BCI, Papayanis, Hyatt, Hatamyar, Meyer, Collier, and others allegedly fraudulently obtained and retained financing and other funds for BCI and enriched themselves to the detriment of investors, lenders and others. It is also alleged that the individuals concealed the scheme by providing false testimony and information in connection with the SEC’s lawsuit, misleading and attempting to mislead BCI’s investors and independent auditors, and creating phony accounting records.
If these individuals proceed with a trial, the government does not have to prove every crime beyond a reasonable doubt. Legally, as the long as the government can convince a jury of one of the crimes, the individual(s) will be found guilty. Unfortunately at sentencing, the judge will be able to consider every bad act, which includes the alleged crimes that the individual was not found guilty of, when determining the length of the sentence. Meaning, even though the individual was not found guilty of those alleged crimes in a court of law, the judge may still consider those when determining the sentence. Such practice is extremely unfair to the individual, since they were not found guilty by a jury, however, it is legal and it occurs every day in federal sentencing.
Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.
The author of this blog is Douglas McNabb. Please feel free to contact him directly at firstname.lastname@example.org or at one of the offices listed above.