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Missouri Owner of Helicopter Sales/Rebuilding Firm Pleads Guilty to Wire Fraud and Money Laundering Charges after Selling Damaged Helicopters

On March 4, 2008, Robert A. Schlotzhauer, owner of Falcon Helicopters, Inc. (Falcon), pled guilty in U.S. District Court, Kansas City, Missouri, to wire fraud and money laundering. In 2001, in violation of Federal Aviation Administration (FAA) regulations, Mr. Schlotzhauer repaired and returned to service an engine compressor that was removed from a helicopter that crashed into the ocean. Then, in December 2005, Mr. Schlotzhauer sent an e–mail to a customer stating that the compressor–which the customer ultimately purchased for $25,000–was involved in a hard landing after running out of gas, when he knew that the helicopter was submerged in the ocean. This was also in violation of FAA regulations, as FAA requires disclosure of the true condition of the surplus part and a series of inspections to certify the part is still serviceable before it can be used again.

In March 2006, Mr. Schlotzhauer purchased a $31,000 cashier‘‘s check using the proceeds from the sales of the compressor. He falsely stated that the payee on the check was someone other than himself in order to conceal the ownership of the unlawful proceeds. Mr. Schlotzhauer agreed upon sentencing to pay a fine of $550,000, as well as make $63,854 in restitution to victims of his schemes. He has also agreed to serve 12 months home confinement and a period of probation to be determined by the court, as well as surrender all his repair–related FAA certifications. As part of the plea agreement, Falcon‘‘s assets will be released to facilitate the sale of the company. This case was worked with FAA‘‘s assistance. A sentencing hearing is scheduled for September 15, 2008.