NEWPORT NEWS, Va. — The former head of a now-defunct airline has pleaded guilty to fraud in connection with the airline's failure.
Michael Morisi, 59, of Suffolk pleaded guilty to one count of wire fraud and one count of filing a false income tax return.
According to court documents, Morisi was president of People Express Airlines, Inc. (PEX), which engaged in failed start-up operations at the Newport News/Williamsburg International Airport in 2014.
Morisi helped PEX get a $5 million loan from TowneBank that was guaranteed by the Peninsula Airport Commission, but within a month, the airline had drawn down nearly the entire loan amount.
People Express stopped service after less than three months and eventually defaulted on numerous liabilities, including the TowneBank loan.
Prosecutors said Morisi opened new bank accounts to receive insurance proceeds and avoid seizure of funds while claiming he did not have the money to pay the loan back. He would move accounts to avoid detection and filed tax returns for three years that falsely omitted income he earned.
With Morisi's guilty plea, he could face up to 23 years in prison when he's sentenced on November 15.
Meanwhile, the former executive director of Newport News/Williamsburg International Airport, Ken Spirito, has pleaded not guilty to federal charges for his role in misusing public money in the People Express failure.