EZjet boss sued for stealing US$5.4M…Airline says Ramdeo is not sole investor
- insists passengers not affected
Low-cost carrier, EZjet Airlines, yesterday admitted that there are other investors in the company and vowed to continue flying despite its founder being accused of stealing US$5.4M from a US hospital chain.
Its Chief Executive Officer (CEO), Sonny Ramdeo, announced Friday that he has stepped down to clear his name, one day after news broke that he allegedly siphoned off US$5.4M from Promise Healthcare and diverted it to EZjet and his payroll company, ‘PayServ Tax Inc’.
Promise Healthcare reportedly said that monies were allegedly embezzled in the last two months, bringing worries over the future of EZjet which is operating charter flights to New York and Canada.
Yesterday, Rosalinda Rasul, who has been appointed, acting CEO in place of Ramdeo, insisted that it is business as usual with no immediate drop in bookings. She denied reports that the chartered aircraft has been seized or moved by the army to another section of the CJIA, in light of the US court proceedings.
She also denied that the company owed suppliers and other creditors.
Speaking with the media at EZjet’s Brickdam office yesterday, Rasul, in responding to the question on who owns EZjet, directed the newspaper to Ramdeo.
“I think Sonny is the best person to answer that. As far as we the operators knew, it was Sonny all the time… Only because of this (media reports) that we know that there may be other people involved. But Sonny is the best person to answer that.”
The official was not aware that monies were allegedly embezzled from Promise Healthcare and diverted to EZjet’s accounts.
“I only learnt of it (the reports) yesterday (Thursday)… the same time everybody learnt of it.”
News that its founder, Sonny Ramdeo was allegedly embroiled in a multi-million embezzlement scheme has not immediately affected bookings, she said.
EZjet’s entrance into the local airline industry last December was viewed by competitors with suspicions with questions over the source of the finances. With other charter companies and more recently, Redjet, going bellyup, EZjet has been under pressure but has been announcing several promotions, some of which have left observers stunned. Ramdeo claimed that he used his mortgage, pension and stock options to fund the venture.
My private business!
There have also been questions in recent days on whether Ramdeo could just step aside in light of the fraud allegations and even whether he had the authority to appoint a CEO.
According to Rasul yesterday, Ramdeo and his “advisors” in the US discussed the issue within the last few days and met with her. That was when Ramdeo indicated his intention to resign as CEO.
“He asked me to carry the responsibilities of the CEO with support from the board,” Rasul said.
The new CEO is hoping to stabilize the company and even address some of the issues and breakages that Ramdeo could not because of his other job in the US.
She admitted that she is reporting to Ramdeo “periodically” since he has a “broad picture…vision for the airline. And my job is to do what is necessary to make it fit to see that vision come through.”
According to Rasul, she is reporting to Ramdeo “out of respect” and out of the fact that “he is the owner… come what may. He needs to know what is happening to this company that he has invested his money into.”
Reporting on the financial health of EZjet, Rasul said the company is doing well. “I would not say that we are on top of the world but we are paying our bills.”
As a matter of fact, EZjet is eyeing other planes for the upcoming December passenger rush.
In a separate statement to the media, the company yesterday said that the civil lawsuit against Ramdeo is “his private business and will be settled by him; Sonny is not on his way to the “slammer”.”
The company said that it has received no concessions from PPP/C Government and that former President Bharrat Jagdeo has no connection to EZjet, “other than we hope to someday have him as a passenger on one of our flights.”
On Friday, Ramdeo in a statement to the media, accused Promise Healthcare of itself being involved in a US$550M diversion of company’s funds and said that its principals are in court for it.
He alleged he was being framed.
“Since my former bosses are themselves in court over diversion of over US$550M of company funds, they elected to claim ignorance and innocence when it came to coming clean about the investment. Instead, they alleged that I diverted funds to EZjet, which I did not.”
Ramdeo, who hails from Windsor Forest, West Coast Demerara, hinted that he will be returning to the management fold of EZjet once he is vindicated.
“In the interest of removing all doubt about the viability of EZjet for which I have worked tirelessly during the past one to one-and-a-half years to establish, I am removing myself from EZjet management, until this embarrassing matter has been cleared up and my good name has been restored.”
According to the Court House News Service website, Ramdeo and his two companies – Ezjet and ‘PayServ Tax Inc.- allegedly embezzled US$5.4 million from it from Promise Health, one of the US’ largest long-term acute care hospital organizations. Most of the money, it was claimed, went to EZjet and the payroll company. The sum was said to have allegedly been taken over the past two months.
Ramdeo and his companies were accused of stealing the money from Promise through a “sophisticated scheme of fraud and deception”.
“Specifically, Ramdeo incorporated a company called ‘PayServ Tax Inc.’ and deceived Promise’s senior management into believing that PayServ was a legitimate payroll tax processing company affiliated with the nationally known payroll processing company, Ceridian. Based on this lie, he deceived Promise into transferring millions of dollars to PayServ Tax Inc. and diverted over five million dollars of Promise’s money to himself and his companies,” the complaint states.
Ceridian is not a party to the complaint.
Reports said that Ramdeo forged signatures on standing transfer orders that purported to authorize Promise’s bank to debit funds from Promise’s account for transfer to PayServ’s account at PNC Bank.
“Significantly, in the past two months alone, Ramdeo stole US$5,387,000 from Promise by diverting its funds to EZjet. He did this by diverting money in the PayServ account that had been deposited for payment of Promise’s payroll taxes to his jet charter company, EZjet GT Inc.
“Upon information and belief, since creating PayServ, Ramdeo has been knowingly and intentionally mis-stating the amount of payroll taxes actually due by Promise and/or misstating the amount of payroll taxes actually transferred to government agencies and stealing the excess funds (in a sum that exceeds US$5,000,000).”
In March, during a press conference, Ramdeo said he was courting at least two US healthcare companies to help with investments.