EZjet boss faces 60 years in jail for $20M fraud

Dec 14, 2012 News

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–    stranded passengers asked not to try to cash cheques…accounts empty

Hours after his arrest Wednesday morning, founder and Chief Executive Officer (CEO) of EZjet Air Services, Sonny Austin Ramdeo, appeared before a New York court, accused of stealing US$20M from a hospital chain over a seven-year period.
Some of the monies he is accused of stealing were said to be used to finance the operations of EZjet, a chartered airline that he started up last year December, according to prosecutors. He remains in jail in New York without bail.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI); Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID); and Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), investigated the fraud and charged Ramdeo, 35, with wire fraud.
They charged him with a US$20 million federal payroll tax fraud scheme.
The Federal agents said that Ramdeo kept the money paid by Promise and Success Healthcare to his private company, PayServ, for his personal use.
Ramdeo is expected to be removed to the Southern District of Florida on these charges.
The federal agents had signaled their intention to arrest him in early November. He immediately went into hiding, but gave the impression through his local country manager, Rosalinda Rasul, that he was communicating with the Feds.
He even returned as Chief Executive Officer having resigned when the first accusation of theft surfaced through a writ filed by Promise Healthcare, accusing him of stealing US$5.4 million.
Ramdeo, the US Federal Bureau of Investigation (FBI) announced late Wednesday, will soon be taken to Florida, another state in the US, to face trial for the charges which were instituted on December 6, all linked to Promise Healthcare.
A former resident of Windsor Forest, West Coast Demerara, the 35-year-old Ramdeo faces up to 60 years in jail on three counts of wire fraud, with a mandatory fine of US$250,000.
He could also be fined twice the amount of money he stole or twice the sum his victim lost.
Yesterday, Country Manager of EZjet’s Guyana operations, Rosalinda Rasul, admitted that Ramdeo was on the run from the time the Feds declared an interest in him.
The details emerging now speak of a man who closely controlled the troubled low-cost carrier even while hiding from the FBI. He managed to fool staffers into believing that everything was alright. He would only answer emails. Nobody seemed to have known where he was.

 

Cornered
Investigators cornered Ramdeo in Brooklyn, New York on Tuesday night even as he was in a Skype conference call with Rasul in Guyana and his henchman, Richard Lee, in New York.

He was immediately arrested and placed before a judge in a federal court in the Eastern District of New York.
Court documents released by the Feds explained that Ramdeo was employed as the Director of Payroll of Promise Healthcare Inc. and Success Healthcare LLC, which in total, operated 17 hospitals across the US. He was responsible for the payments of bi-weekly wages and related payroll taxes for more than 3,500 employees of the companies.
According to the indictment, as early as September 3, 2010, and continuing through on or about October 12, 2012, at Boca Raton, Palm Beach County, in the Southern District of Florida, and elsewhere, Ramdeo devised a scheme to defraud the hospitals by stealing the payroll taxes.
He did this by establishing a company called Payserv Tax Inc. which he claimed, using false emails, was a subsidiary of Ceridian Corporation, a well known company that once did payroll services for the hospitals.
It was based on this claim that the hospitals trusted him and Payserv with millions of dollars.
Using this authority, he routinely transferred money from the hospitals to his Payserv accounts.
Conspiracy
The indictment also said that Ramdeo, in November 2011, incorporated EZjet and later, without authorization, transferred the money from Payserv to the accounts of EZjet.
This was for expenses including airplane and crew rental, fuel, food, ground crew and air terminal costs.
Ramdeo was charged with three counts. He was accused on December 8, 2011, of transferring $45,000 from Promise Hospital of East Los Angeles L.P. to the Payserv account at PNC Bank.
Another charge was that on July 11, 2012, he transferred US$318,696.19 from Promise Hospital of East Los Angeles
The last charge was that on October 9, 2012, he also authorized a transaction of US$100,828.42 to be wired from the Promise Hospital of Ascension Inc. account at TD Bank to the Payserv Tax, Inc. account at PNC Bank.
The name EZjet and Sonny Ramdeo became well known in Guyana over the past year after the low-cost charter started flying the New York to Georgetown route in December last year.
There were immediately questions about the source of financing and his mysterious investors.
The Guyana Government said that EZjet and Ramdeo passed inspection and that the US and other territories had conducted similar due diligence.
Ramdeo flew to Guyana earlier this year with a management team and during a press conference, insisted that it was his own money, taken from savings, his pension and stock options and mortgage, that was financing the charter.
He also denied that former President Bharrat Jagdeo and Jagdeo’s close friend, Dr. Ranjisinghi ‘Bobby’ Ramroop, who manages Queens Atlantic Inc, had shares in EZjet.
In early November, EZjet had its licence revoked by the US Department of Transportation after Swift Air, an Arizona-based aircraft company, complained that the low-cost charter owed them a significant sum of money. Guyana, Trinidad and Toronto, Canada followed suit.
Workers walked out of the New York office not long after leaving passengers unsure how they would get back hundreds of thousands of US dollars.

 

Hiding
Earlier this week, EZjet criticized Government over its decision to grant Caribbean Airlines (CAL) flag carrier status, and vowed to return to full operations by Easter next year.
EZjet said that it has found investors. It had made no secret that it may have been interested in the status which allows an airline a number of lucrative concessions in the host country.
Yesterday, the country manager, Rosalinda Rasul said that stranded Guyanese passengers who descended on the offices yesterday, could be owed as much as $50M, with over 300 of them to be refunded.
The company’s Georgetown office had issued cheques to a number of stranded Guyanese passengers with a pay date of December 14.
Yesterday, she begged stranded passengers in Guyana not to take those cheques to the bank as there is no money in the EZjet accounts. She said that Government is now handling refunds. Government is holding US$200,000 ($40M) in a passengers’ security deposit for EZjet.
Yesterday, Rasul distanced herself from the Ramdeo arrest, making it clear that she was not aware of any suspicious monies in EZjet’s accounts in Guyana. She is unaware of the status of the bank accounts of EZjet in the US. Only Ramdeo knew about all of the company’s finances.
The official was unclear what would happen to the passengers in New York who were left stranded.

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