WASHINGTON -- Air
travel entrepreneur Scot Spencer has been permanently banned from
the aviation industry by the Department of Transportation (DOT),
which is imposing a $1 million fine on Spencer and three related
companies, Ascend Aviation Group, Ascend Aviation Marketing and
Sales and KCP Leasing and Services.
The DOTs
enforcement office had accused Spencer of operating illegal
charters for sports teams and other clients via Ascend
Aviation.
DOT
Administrative Law Judge Richard Goodwin approved the ban and fine
Aug. 23, entering a default judgment after Spencer refused orders
to turn over documents related to the case. The judges decision
will become the final order of the DOT later this month unless
Spencer or Ascend intervene.
Also named in the
original complaint was George Warde, a long-time industry executive
who was Spencers partner in Ascend Aviation. Warde reached a
settlement with the DOT in early August under which he was fined
$30,000.
Spencer has been
involved in a number of enterprises over the years, several of
which raised compliance issues at the DOT. By 1990, the DOT was so
wary of Spencer that it tried to bar him from getting involved in
Braniff III and demanded affidavits from its investors that Spencer
would have nothing to do with the airline.
They provided the
affidavits, but Spencer remained involved in the management of the
airline before and after its Chapter 11 filing in 1991. After it
ceased operating in 1992, Spencer was charged and later convicted
of conspiracy and bankruptcy fraud and sentenced to 51 months in
prison.
His latest
enterprise, Ascend Aviation, was the owner of 13 727-200 aircraft
acquired from American, according to the DOT. Ascend had no airline
certificate, but the DOT alleged that Spencer effectively operated
it as a charter airline by leasing four aircraft to Ryan
International, a charter carrier in Wichita, Kan., and requiring
that they be operated exclusively for Ascend.
The enforcement
complaint alleged that Spencer during 2003 arranged charters under
long- and short-term contracts with the Los Angeles Dodgers, San
Francisco Giants and other charter customers, skirting requirements
that certain charter deposits be protected by surety bonds and
escrow accounts.
The enforcement
office alleged that Spencer and Ascend did not operate as agents of
Ryan, but contracted directly with the public to provide air
transportation ... as the principal responsible for providing that
service, a violation of the Federal Aviation Act. Ryan accepted a
cease-and-desist order and paid a penalty to the DOT last year for
its role in the operation.
To contact
reporter Andrew Compart, send e-mail to [email protected].