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Feds seeking $3.3M fine against developer

July 26, 2018
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private jet Gulfstream on airport runway
A private Gulfstream jet stands on a runway. Photo via wikimedia.org

The Federal Aviation Administration has proposed a $3.3-million civil penalty against a developer in the region for allegedly conducting hundreds of commercial flights in violation of FAA regulations.

The FAA alleges Portage-based Hinman, under its subsidiary Hincojet, entered multiple timeshare agreements with other companies to use its aircrafts.

The FAA alleges the company overcharged its clients on 850 flights.

Tim Maher, a partner with the law firm Barnes & Thornburg, who is representing Hinman in the dispute, said Hinman will meet with the FAA near the end of August to contest the proposed fine.

“We intend to sit down and constructively contest the FAA, and we have a very different opinion and a different outcome that we want,” Maher said.

Hinman was allowed to charge for certain expenses for each flight under the timeshare agreements, including fuel, oil, lubricants and other additives and "an additional charge equal to 100 percent" of those costs, according to the FAA.

The FAA claims Hinman charged expenses exceeding those allowances for 850 flights and, as such, was required to conduct the flights in accordance with regulations applicable to commercial operations.

Because Hinman was allegedly charging over the expenses allowed under Part 91, the firm should have been operating the flights under Part 135, which applies to commercial operations, according to the FAA. As a result, Hinman allegedly failed to meet the FAA’s Part 135 requirements for record keeping, including pilot records and load manifests, for each flight.

The FAA also claims Hinman double billed timeshare clients on multiple occasions. FAA investigators claim Hinman billed a client for a trip aboard its Hawker aircraft from Connecticut to North Carolina and then to Florida. On the same day, the firm allegedly billed another client for a trip aboard the same aircraft that included multiple stops on a trip from Kalamazoo to Detroit, Indiana, Illinois and back to Kalamazoo.

The FAA contests the aircraft was incapable of conducting all of the flights in a single day.

Lastly, the FAA alleges the firm of having no Part 135 training program in place, and the pilots operating the flights were not authorized to conduct the flights under Part 135.

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