The former head of Newport News/Williamsburg International Airport was arrested Monday, charged with a series of federal financial crimes involving the airport’s secret $4.5 million loan to a defunct airline.
Federal prosecutors charged Ken Spirito with 18 counts of of violating federal law, all involving a complicated series of financial transactions. An indictment unsealed Monday says the maneuvers were meant to hide the use of public funds to finance People Express Airlines during its brief time operating at the Newport News airport in 2014.
The airport fired Spirito in 2017, accusing him of misusing public funds for personal expenses, all unrelated to the People Express deal.
The loan, made in 2014 and repaid in full with public funds, was disclosed in 2017 in response to Daily Press questions and Freedom of Information Act requests.
The charges include 11 counts of taking other entities’ money — specifically, state grants to the airport, federal money meant to promote air service and sums from a regional airport development program — and using them for purposes those bodies had not approved.
The total sum involved was $5.2 million, juggled through several different accounts, all to mask the actual amount lent but never repaid by People Express, the indictments allege.
In addition, Spirito was charged with six counts of money laundering and one count of providing false information to the Federal Aviation Administration, when it asked about the use of its funds after the Daily Press reports.
The grand jury that indicted him also said he could be forced to hand over any money or property traceable to the People Express loan if he is convicted of any of the misuse of funds or money laundering charges.
After appearing in U.S. District Court in Norfolk on Monday afternoon for formal presentation of the charges, Spirito said he could not comment.
In court, handcuffed, wearing a black T-shirt and khaki shorts, he awkwardly paged through the 20-page indictment, frowning at times, shaking his head no, and nearing the end, raising his eyebrows in apparent surprise.
The indictment alleges Spirito took the lead in arranging the loan, though he has said he was acting on instructions from the airport board, which actually approved the deal.
The board did so in a closed-door meeting, and empowered its chairman to sign the loan agreement with a vaguely worded public resolution that did not mention the loan or People Express.
The indictment says board members may not have fully understood the loan or the nature of the airport’s real commitment to People Express, which was a startup that was subject to federal tax liens and other other financial claims.
People Express operated for less than three months.
Spirito was released on his own recognizance, on condition that he not leave Virginia. He will be arraigned June 10 in the federal courthouse in Newport News.
