Crime

Ex-Myrtle Beach flight operators convicted of bank fraud

Two former executives of a defunct Myrtle Beach charter airline were found guilty of stealing millions in a years-long scheme.

This week, a federal jury in New Jersey found Judy Tull and Kay Ellison guilty of various crimes related to bank fraud, according to court records. The indictments were handed down in 2015.

The two co-founded Myrtle Beach Direct Air & Tours in 2006 and, in 2012, the company filed for bankruptcy.

According to their indictments, the two created a scheme to defraud a New Jersey bank.

The Department of Transportation regulates charter operations such as Direct Air & Tours airline. One regulation to financially protect passengers require airlines to keep payments for future flights in a bank account, according to court records. That money isn't paid to the company until the flight is complete.

As part of the scheme, Tull and Ellison made "ghost reservations" to make it seem there were like more passengers on flights and more revenue was generated. They would then submit fraudulent reports to the bank and cancel the "ghost reservations." As a result, they took more than $8 million in fraudulent transfers.

They also took more than $12 million from the bank by requesting money from the bank before the flights, calling them a "membership fee," and then made requests after the flights landed for the same money, according to court documents.

When the company filed for bankruptcy, passengers bought tens of thousands of tickets for future travel. A bank account should have had more than $30 million, but an investigation found only $1 million in the account, according to the indictments.

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