AOPA is reporting that the owner of a flight school that went bankrupt while allegedly holding hundreds of thousands of dollars in student deposits has struck a plea deal with prosecutors and pleaded guilty to tax evasion. Kevin Rylchik is facing a prison term but by pleading guilty he avoided indictment on a laundry list of serious federal charges relating to his operation of American Aviation at Manassas Airport in Virginia and several other businesses. The charges were filed against Rylchik in May, three months before he abruptly closed the school on Aug. 1. and filed for bankruptcy for the businesses and personally.
Sad. In my 40 plus years in this business I have seen this happen too many times. These grifters con the students who don’t know any better into giving them ridiculous amounts of money and usually make them fly in marginally safe if not dangerous old sht boxes and milk them dry with “ no you are not ready yet you need more time” and on an on. In the worst cases this is what happens and the kids and their parents are sht out of luck. Time to make an example of this guy and lock him up for 25-life. Our industry needs to have a campaign that informs people that ALL FLIGHT TRAINING IS PAY AS YOU GO. TRUST NO INE AND IF THEY TRY TO CON YOU DISCOUNTED PRICES IF YOU GIVE THEM A PILE OF CASH RUN THE OTHWR DIRECTION. The only satisfaction the poor victims will get is to see this guy locked up til he croaks of old age.
I’m with Jeff on this one. The plea bargain is a get out of jail for cheap card for swindlers and snake oil salesmen, and the victims are gafucked in every situation. As the article points out, they will never see their money again.
This SEVERELY damages the lives of all these clowns swindled, while they should be awarded damages on top of thir losses. The IRS gets its money first but the victims are screwed.
Lock them up, throw away the key, and maybe someone else playing the con game won’t try it. Losing everything in your life, down to your shoelaces and freedom, is a pretty good deterrent.
From the photo, I thought he was a Texas Ranger. Apparently he also held the title of President, Security Associates International. Just goes to show that you can never judge character by appearances or job titles.
I’m surprised the IRS let this go for years. They should be the last ones to get their money for their incompetence. I would be writing my congressman to make some changes. Had the IRS done it’s job this school would have been shut down early on. There needs to be someway for employees and students to check to see if a company is paying it’s taxes. I’ve seen it before where students who want to be pilots are milked out of thousands of dollars before they realize they just aren’t cut out to be pilots. It’s too bad there are schools who take advantage. I’m sure the aviation community has a good idea what kind of person is qualified to become an airline pilot.
The situation this conman created is just like the Silver State Helicopter fiasco that happened in 2008 (HQ based in Las Vegas). Only difference was the owner was siphoning money from multiple flight schools across the U.S. for his personal use and gifts for influential people to further his political aspirations. 2500+ students were left holding student loans up to $70K. Though there was a class action lawsuit that resulted in most students having to repay loan amounts based on certificates earned, what happened to the owner as far as prison time was never revealed. An expensive lesson.
I’ve seen several other fight schools who offer discounts, for set prices to get certain ratings. If paid in full up front. I would never fall for that. That’s putting way too much confidence in the schools business. If they don’t offer a pay as you go system, that’s not full of penalties for doing so, then it’s time to look somewhere else. Or they should offer an escrow system where they can only access the funds as they are used. The fact they even offer a discount for payment up front draws into question their financial health. It’s a quasi ponzi scheme.
The IRS probably wasn’t being incompetent here, since they’ve been known to play the long game in cases like this, since the longer someone is delinquent on taxes, the worse it gets when the IRS decides to quit being polite about it.
As a lot of tax cheats have learned the hard way, the IRS has been known to operate by sending periodic reminders that “Hey, you owe us money” for a while and making some effort to collect, but if those get ignored long enough, they’ll simply take a bit of time, build an airtight case, and then slap that person with felony tax evasion charges, which seems to be what happened here.
I agree 100% with you about there needing to be a way to check if a business is delinquent on taxes, especially in situations like flight schools where there may be things like the GI Bill involved.
As far as I can tell, Jerry Airola got away from the Silver State Helicopters ponzi scheme without ever being held accountable (I can’t find any references to criminal charges, but there might have been some civil suits), and he went on to a career in law enforcement in Texas.
However, in March, he got indicted for “misuse of official information, official oppression, and unauthorized obtaining of criminal history record information” for using law enforcement resources to harass a couple and unlawfully arrest three people, so it sounds like his behavior never really changed.
I purchased my first plane, a Tri-Pacer, from a small-time dealer for $5,000. I got a nice bill of sale but when I went to register it, I discovered the dealer did not hold title nor had he paid its owner and the $5k was in the wind…along with a total of about a quarter million from two other considerably more substantial sales. Lawyer time, sued everyone, I did get the Tri-Pacer, the true owner settled for $1500 to escape the mess, the lawyer pocketed a similar amount, I got a valuable lesson on buying/selling airplanes, and the crooked dealer moved to Texas where he became a deacon at a local church.
Sad but interesting comment, Skypark. I’m afraid these scams are even more prevalent with the widespread use of social media. My son was looking to purchase a backhoe. Found one in his hometown (PHX) that was a super deal. He then looked at the background in the pic - nothing in the area even remotely like it. I searched and found the exact same ad in five other cities! It’s amazing the power that greed and envy can have over a human soul.
There’s nothing wrong with offering a discount for cash or check deposits. I offer 10% for every $1000, and I think that is a common flight school offering and not something people should “run for the hills” over as some here have said. It’s a great way for smaller schools to generate cash flow. You know whats worse and more common? People who don’t pay their bills on time or at all, and have no idea how expensive this business is to run on a daily basis. That said, some folks want to pay up front but I am uncomfortable with that liability on the books as a smaller school! I usually prefer smaller increments, everyone wins and less risk!
Flight school owners just have to have integrity, play by the rules, and be willing and able to refund people their money when necessary. This fellow didn’t seem like he was doing any of that.
It is bad that businessmen (and women) who pocket the money and run aren’t held accountable sooner. Some grandchildren (and maybe the grandparents) are getting stuck with this. I guess the push over the years to de-fund the IRS has had consequences.
This happened to me in 1979. I was a young pilot who had saved up over the summer working in a steel mill so I could obtain my instrument rating.
Went to a flight school in Yougstown, Ohio and gave them a nice chunk of change up front to get a discounted rate. Everything was fine until about half way through the owner shut the doors and he still had about $800 of my money (a lot for a 19 year old in those days).
I went on to finish the rating elsewhere but it was a bitter life lesson.
BTW - In the aftermath I had to literally restrain my father from taking revenge on the owner. Different times then.
