DHS Contractor to Pay $3.9 Million After Allegedly Inflating Flight-Hour Invoices

Key Takeaways

• Settlement Amount: Zephyr Aviation and its owners agreed to pay $3.9 million to resolve alleged False Claims Act violations.
• Inflated Invoices: The company allegedly billed DHS for flight hours that exceeded actual times flown by subcontracted aircraft operators.
• Contract Timeline: The alleged overbilling occurred between 2022 and 2025 under CBP transportation contracts.
• Government Response: DOJ, DHS-OIG, and CBP officials emphasized the settlement as part of ongoing efforts to protect taxpayer dollars and enforce accountability in federal contracting.

Deep Dive

Zephyr Aviation, a contractor for the Department of Homeland Security, has agreed to pay $3.9 million to settle federal allegations that it charged the government for flight hours that never occurred. The agreement resolves claims that the company and its owners, Frederick Credno Jr. and Frederick W. Credno III, violated the False Claims Act while performing transportation work for U.S. Customs and Border Protection (CBP).

According to federal officials, the alleged overbilling took place between 2022 and 2025, when Zephyr held contracts to charter flights moving individuals in CBP custody. Zephyr hired outside aircraft operators to fly those missions, but prosecutors say the company routinely submitted invoices based on inflated flight times, resulting in claims to DHS that exceeded the operators’ actual logged hours.

“Companies that do business with the government are expected to charge the United States accurately for the goods and services they provide,” said Assistant Attorney General Brett A. Shumate, emphasizing that federal authorities will continue pursuing vendors that overcharge taxpayers.

Inspector General Joseph V. Cuffari of DHS-OIG echoed the warning, noting that the settlement “sends a clear message” that fraud within federal contracts will carry significant consequences. He credited law enforcement partners and DOJ’s Civil Fraud Section for “tirelessly pursuing this investigation.”

“This settlement showcases CBP OPR’s ongoing commitment to accountability and integrity,” said Acting Assistant Commissioner Robert B. Danley, adding that the agency remains focused on protecting taxpayer funds and holding contractors accountable when they misuse government programs.

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