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.
The result is that dozens of students, some of which had as much as $100,000 on deposit, have no chance of getting more than a small fraction of their money back as they join about 500 other creditors named in the proceedings. The tax evasion case makes their situation even bleaker because the IRS is always the first to be paid in cases like this. The IRS said Rylchik evaded taxes and withheld employee deductions without remitting them to the government for years and owes them $3.4 million. Any assets will go toward paying that before creditors see any reimbursement.
