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Press Release

Former Head of People Express Airlines Pleads Guilty to Fraud

For Immediate Release
U.S. Attorney's Office, Eastern District of Virginia

NEWPORT NEWS, Va. – A Suffolk man pleaded guilty today to fraud in connection with the failure of People Express Airlines in 2014 and the filing of a false income tax return.

According to court documents, Michael Morisi, 59, was the former president of People Express Airlines, Inc. (PEX), which engaged in failed start-up operations at the Newport News / Williamsburg International Airport. Morisi led the push to get PEX operational, despite a failed track record of obtaining private investments and significant outstanding liabilities. A switch to a focus on the public commitment of funds led to PEX obtaining a $5 million loan from TowneBank that was guaranteed by the Peninsula Airport Commission (PAC). The loan was funded in June 2014.  Within a month, PEX had drawn down nearly the entire loan amount. PEX operated for approximately three months before suspending service due. In the aftermath of the suspension of operations, various creditors sought repayment from PEX in 2014 and 2015. 

At the same time, Morisi opened new bank accounts to receive insurance proceeds and avoid the seizure of funds. Morisi provided false representations to creditors (including the PAC, which paid over $4 million to satisfy the TowneBank loan) claiming that no funds were available. He made large purported back salary payments to himself and other executives in lieu of paying creditors.  When the first bank account was made subject to a state tax lien, Morisi moved accounts again so that he could receive and divert additional insurance proceeds. He also filed false tax returns for three years omitting income and failed to file returns for two additional years. 

Morisi pleaded guilty to one count of wire fraud and one count of filing a false federal income tax return.  He faces a maximum penalty of 23 years in prison when sentenced on November 15. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Kelly R. Jackson, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), Colonel Gary T. Settle, Virginia State Police Superintendent, and Jamie Mazzone, Regional Special Agent in Charge for the Department of Transportation Office of Inspector General, made the announcement after U.S. Magistrate Judge Lawrence R. Leonard accepted the plea. Assistant U.S. Attorney Brian J. Samuels and Lisa R. McKeel are prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:19-cr-44.


Joshua Stueve
Director of Public Affairs

Updated July 25, 2019

Financial Fraud