NEWPORT NEWS, Va. (WAVY) — The former president of People Express Airlines — one of two men at the center of a scandal involving a now-defunct airline that flew out of the Newport News-Williamsburg International Airport — has been sentenced to two years in prison.
Michael Morisi, 59, of Suffolk, was sentenced Thursday in federal court to two years for fraud and filing a false income tax return, the U.S. Department of Justice wrote in a news release.
He has until 2 p.m. March 20 to turn himself in to begin serving his sentence.
Morisi was the former president of People Express (PEX), a failed startup airline at the airport in Newport News (PHF). The airline stopped service at the airport in 2014.
Despite a failed track record of receiving private investments and having significant outstanding liabilities, Morisi led an effort to get PEX operational.
That push also included PEX receiving a $5 million loan in June 2014 from TowneBank that was guaranteed by the Peninsula Airport Commission. According to the release, the loan was given due to a focus on “the public commitment of funds.”
Within a month of the loan, PEX had drawn down nearly all of the loan amount.
PEX operated another three months before suspending service.
After suspending service, creditors asked for repayment of debts from PEX in both 2014 and 2015.
Morisi then opened new bank accounts to get insurance proceeds and avoid the seizure of funds. He gave false information to creditors, including the Peninsula Airport Commission, which gave $4 million to satisfy the TownBank loan, and claimed no funds were available.
According to the release, Morisi made “large” back salary payments to himself and other executives rather than paying money back to creditors.
When the first bank account became subject to a tax lien, Morisi then moved accounts so he could obtain and divert additional insurance money.
He filed false tax returns for three years with missing income information, and failed to file tax returns for the following two years.
Former executive director of the airport Ken Spirito also pleaded not guilty to charges in June 2019.
The charges against Spirito involve the airport’s loan to People Express.
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