Hansen Helo Execs Charged with Fraud, Money Laundering

 - June 1, 2018, 3:13 PM

In late May, the FBI arrested Hansen Helicopters owner John Walker and three company employees—executive vice president Marvin Reed, director of operations Kenneth Crowe, and director of maintenance Phillip Kapp—on charges stemming from an investigation into the fatal crash of a Hughes 369HS, N9068F, operated by the Guam-based company in 2015 on a fish-spotting contract in the Pacific near Manra Island, Kiribati. They were indicted on fraud, conspiracy, money laundering, records falsification, and other charges including the attempted destruction of an aircraft.

The indictment charges Hansen with engaging in a systematic practice of knowingly using uncertified aircraft parts, falsifying logbooks and creating false logbooks, and swapping aircraft data plates to mask aircraft identity and history. This included flying aircraft previously classified as “damaged beyond repair.”  

In addition, during the course of the 2015 crash investigation, the NTSB determined, “The pilot did not hold a pilot certificate issued by the United States Federal Aviation Administration, which is required to operate a U.S.-registered aircraft while in international airspace.” Nor could the NTSB locate any personal flight records for the pilot at all, including a logbook. Both Crowe and Kapp are accused of lying to investigators and falsifying records in connection with the investigation into the crash, which killed the pilot. 

That crash investigation in particular opened Hansen to greater scrutiny. In late 2016, FBI agents raided Hansen facilities in Guam, Saipan, and Georgia, seizing airworthiness certificates, registrations, and logbooks for 15 of the company’s helicopters. Of the 15 registrations and certificates of airworthiness seized, by Hansen’s own account, six were from aircraft whose data plate information was “not original.” They also confiscated several helicopters outright, including one being maintained by Hansen in the Philippines. This shut down most, but not all, of Hansen’s operations. Hansen operates a fleet of Hughes/MD 369/OH-6s for a variety of missions, including fish-spotting throughout the Pacific for large Japanese tuna boats.

Last year, Hansen filed suit challenging the federal government’s authority to retain these seized assets, valued at $4.6 million. The filing contains copies of the questionable airworthiness certificates signed by former FAA inspector Timothy Cislo as well as the names of the various shell companies—12 in all—Hansen used to register the helicopters in question. Although all of the helicopters hold N-number registrations, many of them are registered to separate entities that share a common mailing address on the tiny island nation of Vanuatu, a microstate that has been placed on the international “gray list” by the international Financial Action Task Force (FATF) for its lax anti-money-laundering enforcement, a distinction shared with Syria and Yemen.

The documents seized in the 2016 raids are believed to have pointed prosecutors to bribes being paid to an FAA inspector in exchange for issuing and reissuing special airworthiness certificates for helicopters operated by Hansen without performing the requisite inspections. Cislo pleaded guilty to three counts of honest services wire fraud earlier this year in connection with those charges. Prosecutors charged Cislo with accepting funds from Hansen Helicopters or its representative in 2014, to purchase a Taylorcraft BC-12D with an estimated value of approximately $20,000. Hansen acquired a pair of written off helicopters and returned them to service after Cislo signed off on inspections that were backed by missing/falsified maintenance logs that clearly misstated the extent of the helicopters’ original accident damage. Cislo was also involved in irregularities involving the paperwork on at least eight other Hansen helicopters.

Crowe is also charged with falsifying forms related to the 2017 crash of another Hughes 369, N805LA, being operated by Hansen. He allegedly reported to the FAA that the crew sustained minor injuries and that the aircraft received only minor damage and was subsequently exported to the Philippines. In fact, the crew received significant injuries and Crowe allegedly ordered the helicopter scuttled. During the course of its investigation into that accident, the NTSB reported numerous records irregularities. “Exclusive of the 337 forms, none of the contents conformed to the FAA maintenance entry requirements. The records contained multiple internal service time and/or component number discrepancies.”