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Oklahoma Company and Owner Sentenced for Operating Illegal Charter Flights

On November 13, 2018, James Paul Johnson and his company, Interstate Helicopters, Inc. (Interstate Helicopters), Bethany, Oklahoma, pleaded guilty and were sentenced in U.S. District Court, Oklahoma City, Oklahoma, with failure to make a record to FAA. Johnson was sentenced to a $5,000 fine and $5 special assessment, and Interstate Helicopters was sentenced to a $45,000 fine and a $125 special assessment. Both were charged via information on November 2, 2018.
The investigation disclosed that between May 2014 and July 2016, Johnson and Interstate Helicopters circumvented FAA regulations and operated an illegal fixed-wing aircraft charter service. Johnson and Interstate Helicopters illegally structured the fixed-wing charters as dry leases between the passengers and the aircraft owners. Dry leases are leasing arrangements that do not include the provision of crewmembers. Johnson then directed passengers to enter into pilot-service agreements with Interstate Helicopters to obtain pilots and all services necessary for the flight operations.
In the pilot-service agreements, Johnson and Interstate Helicopters agreed to comply with FAA regulations. However, they failed to provide FAA’s Aircraft Registry Branch with copies of Interstate Helicopters’ aircraft lease agreements and notify the responsible FSDO 48 hours before the first flight covered by the lease agreements took off. FAA regulations require these notifications to ensure safe operations of charter flights.