EZjet boss accused of embezzlement in US
Chief Executive Officer (CEO) of EZjet Air Services Sonny Ramdeo is facing a civil suit in the United States filed by his former employers, who are accusing him of devising a “sophisticated scheme of fraud and deception” to embezzle some US$5.4M from their coffers.
Promise Healthcare and 11 of its hospitals have sued Ramdeo, their former payroll manager who it hired eight years ago to manage the payroll for 3,500 employees in its hospitals nationwide.
Ez-Jet GT and PayServ Tax—a company that Ramdeo allegedly set up to commit the fraud—are also named as plaintiffs in the suit, through which the hospital chain is seeking damages for fraud, unjust enrichment, conversion, and civil theft and imposition of a constructive trust.
The suit was filed on October 18 in the Palm Beach County Court. However, the plaintiff’s ex-parte emergency motion for a temporary injunction was denied the following day.
Ramdeo, 34, who recently started operating his airline charter company out of Guyana to the US and Canada, has faced much scrutiny about his funders and core investors. He had earlier this year dismissed rumours that former president Bharrat Jagdeo was one of his backers.
The banker had explained that the service was established by way of a US$1.5 million investment by him and informed that he used part of his mortgage, retirement funds and investment options for its start-up.
Recently, he had sought to reassure about the financial capabilities of the airline as well as its ability to remain in the sector, and had insisted that EZjet was not operating at a loss and has funds in an escrow account.
“We waited in line and went through the appropriate procedures and measures to achieve status of an airline,” Ramdeo had said. According to him, the airline was established as a charter since there was not a significant amount of funds to invest in a more expansive venture.
According to details of the suit, published by the Court House News Service, Promise Healthcare accuses Ramdeo, and his companies of “stealing over five million dollars” through a scheme in which he deceived both the company’s senior management and its auditors.
It said Ramdeo is accused of incorporating a company called ‘PayServ Tax Inc.’ and deceiving Promise’s senior management into believing that it 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,” according to the complaint. Ceridian is not a party to the complaint.
The complaint stated that around October 2010, Ramdeo incorporated PayServ, and thereafter “through a sophisticated fraud including false representations, fabricated documents and e-mails, and a fictitious website” deceived Promise’s senior management into believing that its payroll taxes “were being received, processed, and paid by Ceridian (a global payroll services company that Promise had used for years).”
Instead, the complaint said, Ramdeo received Promise’s money allocated for payroll taxes through PayServ, so that he could steal millions of dollars from Promise along the way. It is believed that he did this by forging signatures on standing transfer orders that purported to authorise Promise’s bank to debit funds from Promise’s account for transfer to PayServ’s account at a bank
“Significantly, in the past two months alone, Ramdeo stole $5,387,000 from Promise by diverting its funds to Ez Jet. 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 misstating 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 $5,000,000),” the complaint said.
It also stated that Ramdeo managed to deceive Promise’s senior management and its auditors by not only fabricating documents, but also emails and websites to deceive them into believing that Ceridian was receiving and processing the chain’s payroll taxes.
“For example, when Promise’s senior management requested additional information from Ramdeo regarding the Ceridian bank account where payroll taxes were being deposited, Ramdeo provided Promise’s senior management with a document – on Ceridian letterhead – which purported to identify ‘the Payroll Trust Account information in which Promise Healthcare’s taxes are being collected into and disbursed out of.’ Ramdeo even fabricated an e-mail to himself from a purported Ken Taylor of Paytax so that it would appear as if he had received the Paytax letter from a third party. However, like Ramdeo’s other representations, the PayTax Letter and the e-mail from a purported Ken Taylor were fraudulent. They were fabricated by Ramdeo in response to Promise’s request for additional information about the payroll tax account,” the complaint stated.
It added that the PayTax letter and email were only one part of Ramdeo’s scheme, charging that he had also purchased the domain name Pay-tax.com and directed that Internet address to link directly to Ceridian’s website so that anyone investigating Pay-tax.com would be deceived into thinking that they were dealing with Ceridian.
When it started, EZjet had to deposit a bond of US$200,000 with the Guyanese and American governments before it commenced operation in December of last year. The relatively new air service has leased three jets—two Boeing 767-200 that operate from Georgetown to John F Kennedy (JFK) Airport, New York and the new Toronto route; and a 737-800 operating from JFK Airport to Port of Spain, Trinidad.