FEDERAL PROSECUTORS TARGET SHAM DRY LEASE SCHEMES
May 9, 2025
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On April 4, 2025, the U.S. Attorney’s Office for the Southern District of Texas filed a civil penalty action against Texas based Prairie Flower Air Asset Company LLC (“Prairie Flower”), alleging that Prairie Flower was operating an illegal charter service using deceptive aircraft leasing practices. According to the complaint, between 2019 and 2023, Prairie Flower was purportedly operating as a direct air carrier even though the company’s sole owner knew that Prairie Flower did not hold the required Federal Aviation Administration (“FAA”) certification. The complaint asserts that Prairie Flower used “sham dry leases” to supposedly lease aircraft to other parties when in fact Prairie Flower itself retained operational control. Absent an FAA-issued certificate, Prairie Flower allegedly chartered at least 237 flights via bogus dry leases under which the company was operating as a direct air carrier. Those operating under aircraft leases must pay particular attention to which party maintains operational control because Prairie Flower and its sole owner could face millions in penalties if convicted. DOT’s Office of Inspector General and the FAA regularly conduct investigations to ensure that aircraft operators are not performing unauthorized charter services. For example, federal prosecutors secured a $700,000 settlement last year from a now defunct aircraft leasing business after investigators uncovered similar sham dry leases made on behalf of the North Carolina-based company in regard to passenger-carrying flights.
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