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NEWS RELEASE

OFFICE OF THE UNITED STATES ATTORNEY

WESTERN DISTRICT OF MISSOURI


JOHN F. WOOD


Contact Don Ledford, Public Affairs ● (816) 426-4220 ● 400 East Ninth Street, Room 5510 ● Kansas City, MO 64106

www.usdoj.gov/usao/mow/index.html


DECEMBER 3, 2008

FOR IMMEDIATE RELEASE


LEE’S SUMMIT HELICOPTER DEALER SENTENCED FOR FRAUD


ORDERED TO PAY $550,000 FINE, LIQUIDATE COMPANY


            KANSAS CITY, Mo. – John F. Wood, United States Attorney for the Western District of Missouri, announced that the owner of a Lee’s Summit, Mo., company that purchases damaged helicopters and repairs them for resale was sentenced in federal court today for a fraud scheme that involved the sale of improperly repaired helicopters.


            Robert A. Schlotzhauer, 68, of Lee’s Summit, was sentenced by U.S. District Judge Gary A. Fenner this morning. Schlotzhaur was ordered to pay a $550,000 fine as well as $63,854 in restitution to Rainbow Air, Inc. The court ordered Schlotzhauer to liquidate any and all assets involved in the maintenance, repair, or rebuilding of aircraft of his businesses, Falcon Helicopter, Inc., and Lee’s Summit Turbine, LLC. He was also ordered to surrender all repair-related FAA certificates and refrain from any involvement in the business of maintaining, repairing, or rebuilding aircraft. Schlotzhauer was sentenced to 12 months of home confinement at his own expense.


            Schlotzhauer recklessly jeopardized the lives of pilots and passengers through this fraud scheme,” said Wood. “In order to boost his own profits, he flouted federal requirements for inspecting and repairing the damaged helicopters that he sold. He now faces a stiff fine and the loss of his business, but we are just thankful there were no injuries or fatalities as a result of this scheme.”


            “The sale of engine components damaged beyond repair for reuse on an aircraft is unconscionable, as it jeopardizes public safety – not only of those in the sky but also those on the ground – for personal financial gain,” said Michelle McVicker, DOT/OIG Special Agent-In-Charge. “Working with the Federal Aviation Administration and our prosecutorial colleagues, we will continue our efforts to uncover unapproved parts fraud and seek punishment of those who compromise the integrity of DOT’s safety programs.”


            On March 4, 2008, Schlotzhauer pleaded guilty to wire fraud and money laundering. Schlotzhauer admitted that during 2001 he repaired and returned to service – in violation of federal law and FAA regulations – an engine compressor that had been removed from a helicopter after it crashed into the ocean. On Dec. 25, 2005, Schlotzhauer sent an e-mail to a customer, falsely claiming that the compressor was involved in a hard landing after running out of gas. Schlotzhauer sold the compressor for $25,000, but when the fraud was discovered, was forced to refund the customer’s purchase. In order to make the refund, Schlotzhauer purchased a $31,000 cashier’s check, falsely stating that the payee on the check was another person in order to conceal the ownership of the unlawful proceeds.


            In 2001, Schlotzhauer extracted components from a McDonnell Douglas 369E helicopter that was involved in an accident and installed those parts in another McDonald Douglas 369E helicopter that was also involved in an accident. The first helicopter was involved in an accident in the Pacific Ocean off the coast of Australia, and was submerged for several hours. This aircraft was insured for $700,000 and was evaluated by an insurance adjuster to be a total loss due to complete salt water immersion and damage from the impact of the crash. Schlotzhauer purchased the helicopter for $35,000 on July 20, 2001. The second aircraft was involved in an accident in Dartford, England, and was sold as salvage to Schlotzhauer for $30,650 on April 16, 2001.


            Schlotzhauer later installed key components of the second helicopter into the first helicopter, which he sold to Rainbow Air for $450,000 on June 25, 2002. Rainbow Air used the helicopter to transport tourists at Niagra Falls.


            This case was prosecuted by Assistant U.S. Attorney William L. Meiners. It was investigated by the Department of Transportation, Office of Inspector General.


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This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at

www.usdoj.gov/usao/mow/index.html