March 10, 2020
Former Peninsula Airport Commission Executive Director Convicted at Federal Trial
On March 10, 2020, following a jury trial in the U.S. District Court, Eastern District of Virginia, Kenneth R. Spirito was convicted on 23 of 24 counts, specifically: 11 counts of misapplication of property from an organization receiving Federal funds, 6 counts of engaging in monetary transactions in property derived from specified unlawful activity, 1 count of falsification of records in Federal investigations, 1 count of conversion of property from an organization receiving Federal funds, 3 counts of perjury, and 1 count of obstruction of justice. He was acquitted on one count of perjury.
On May 13, 2019, he was charged in an 18-count indictment and on September 9, 2019, a superseding indictment charged him with 6 additional counts.
Spirito is the former executive director of the Peninsula Airport Commission, which operates the Newport News/Williamsburg International Airport in Virginia, and he ran the airport from 2009 to 2017. According to court records and evidence presented at trial, in 2014, Spirito led an effort to obtain a $5 million loan from TowneBank for a start-up airline, People Express Airlines, Inc. (PEX). The loan was guaranteed by the Peninsula Airport Commission. Spirito intentionally misapplied various State and federally regulated funds to provide the cash collateral for the TowneBank loan.
When PEX suspended operations in September 2014 and defaulted on the loan, the Peninsula Airport Commission had to repay the bank. Spirito later gave the Federal Aviation Administration false information about the source of the loan payments. In a 2019 civil deposition, he provided false testimony regarding his role in the decision to use the Commission to guarantee the loan and the funds he used as collateral.
DOT-OIG is conducting this investigation with the Internal Revenue Service–Criminal Investigation Division and Virginia State Police.