### UNITED STATES OFAMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Issuedbythe Department ofTransportation onthe 3rd day ofApril, 2013

Friendship Airways, Inc.

d/b/aYellow AirTaxi, and ChristopherBehnam, Individually Violations of 14 CFRPart374 and 49 U.S.C. §§ 41101 and 41712 Served April3, 2013

DOT-OST-2013-0066

NOTICE OF ENFORCEMENTPROCEEDING AND PROPOSED ASSESSMENT OF CIVIL PENALTIES The attached complaint of the Office of Aviation Enforcement and Proceedings (Enforcement Office) alleges that Friendship Airways, Inc., d/b/a Yellow Air Taxi (Yellow Air Taxi), and Christopher Behnam, president and owner ofYellowAir Taxi, violated 14 CFRPart 374 by failing to process credit card refunds within the required period oftime and 49 U.S.C. § 

### 41101 by selling tickets when it did not hold effective Departmental economic authority. In addition, the violations of 14 CFR Part 374 and 49 U.S.C. § 

### 41101 also constitute violations of49 U.S.C. § 

### 41712, which prohibits unfair and deceptive practices. An air taxi operator registered with the Department under 14 CFR Part 298, Yellow Air Taxi held an air carrier certificate (03PA908H) issued by the Federal Aviation Administration (FAA) directing the carrier to follow the operating rules of 14 CFR Part 135. According to the FAA, Yellow Air Taxi ceased operations on May 16, 2011, thereby rendering its air taxi registration ineffective. OnAugust 15, 2011, Yellow Air Taxi surrendered its air carrier certificate to the FAA. On October 18, 2011, the Department's U.S. Air Carrier Licensing Division canceled Yellow Air Taxi's air taxi registration pursuant to 14 CFR 298.24(a) on the basis that it ceased operations. Yellow Air Taxi, at the time of the violations at issue, was subject to the credit card refund requirements ofRegulation Z ofthe Board ofGovernors ofthe Federal Reserve System, 15 U.S.C. §§ 

### 1601-1693r. 12 CFR Part 226 and 14 CFR Part 374, which implement Regulation Z, establish that, with respect to refund requests involving airline tickets purchased with a credit card, a creditor-here Yellow Air Taxi-must transmit a credit statement for a passenger refund to the2

credit card issuer within seven business days of receipt of full documentation for the refund requested. A failure to provide such refunds within the stipulated time period also constitutes an unfair and deceptive practice inviolation of49 U.S.C. §41712.1 As a result ofnumerous consumer complaints filed with the Department against Yellow Air Taxi between August 2010 and October 2011, the Enforcement Office conducted an investigation into whether Yellow Air Taxi was failing to provide prompt refunds, as required by Regulation Z and Depmiment precedent, or to provide refunds at all. The investigation confirmed that the carrier failed to process credit card refunds within seven business days in ten instances, some ofwhich included purchases of multiple tickets, and processed the requests only after the Enforcement Office intervened.2 Additionally, the investigation confirmed that the carrier failed to process credit card refunds entirely in seventeen instances, some ofwhich included purchases ofmultiple tickets, notwithstanding requests by the Enforcement Office that it do so. 3 Further, in at least one ofthe seventeen instances where the carrier failed to process credit refunds entirely, the refund was due on tickets that Yellow Air Taxi sold after it ceased operations.4 Engaging in air transportation without the proper economic authority is in violation of49 U.S.C. § 41101 and selling tickets with lapsed authority constitutes an unfair and deceptive practice in violation of49 U.S.C. § 41712. 5 The carrier ceasedresponding to the Enforcement Office's inquiries inJune 2011. Based on the informal investigation undertaken by the Enforcement Office, there are reasonable grounds to believe that Yellow Air Taxi, under the direction and control ofChristopher Behnam, has violated 14 CFR Part 374, 49 U.S.C. §§ 41101 and 41712 and that an investigation of the alleged violations is in the public interest. Accordingly, pursuant to Rule 407 ofthe Department's Rules of Practice, 14 CFR 302.407, by this notice and complaint we are instituting a formal enforcementproceedingto investigate the allegations set forth in the attached complaint. Upon information and belief, YellowAir Taxi is a "small business concern" as defined in section 3 ofthe Small Business Act, 15 U.S.C. § 632. As such, under 49 U.S.C. § 46301 Yellow Air Taxi and Christopher Behnam, individually, may be assessed civil penalties ofup to $2,500 for each violation of49 U.S.C. §§ 41101 and 41712 or ofconsumer protection regulations adopted by the Department, including 14 CFRPart 374. Under section 46301, each day that a violation continues is considered a separate offense subjectto a civil penalty ofup to $2,500 per day.

See Paragon Air, Inc., Violations of ..f9 US. C.§ 41712 and 14 CFR Part 374, Order 2009-7-17 (July 17, 2009). The ten credit cardpurchases included 14 tickets in total. The seventeen credit card purchases included 35 tickets in total. Further, in six ofthe seventeen instances referenced above, passengers received a refund through their respective credit card companies after filing disputes to claim backthe credit card purchase made with Yellow Air Taxi.
4 This one purchase, made after the date Yellow Air Taxi ceased operations, included eighttickets. In addition to applicable Federal Aviation Administration requirements, in order to engage in air transportation as a direct or indirect air carrier, a citizen ofthe United States must hold economic authority from the Department, either in the form of a certificate ofpublic convenience and necessity issued pursuant to 49 U.S.C. §41 I0I, or in the form ofan exemption from the certificate requirement.3



### The Assistant General Counsel for Aviation Enforcement and Proceedings seeks an assessment of civil penalties in the enforcement proceeding instituted by this notice. Under Rule 407(d) ofthe Department's Rules ofPractice, 14 CFR § 

### 302.407(d), Yellow Air Taxi and Christopher Behnam, individually, are notified that they may be liable for civil penalties of$67,500, reflecting violations of 14 CFRPart 374 and 49 U.S.C. §§ 

### 41101 and 41712. This is not the firsttime that Yellow Air Taxi has demonstrated a poor compliance disposition. In 2008, Yellow Air Taxi's authority to perform commuter operations was revoked by the FAA as a result ofits then-ChiefPilot not being qualified to conduct Operating Experience observations of its pilots and not having the required training program in place. In 2010, Yellow Air Taxi's liability insurance coverage was canceled because ofnonpayment ofpremiums. Subsequentto the cancellation, the air canier continued to operate without the requisite liability insurance coverage, in violation of 14 CFR 205.3 and 14 CFR 298.37. The cancellation ofYellow Air Taxi's liability insurance rendered inefiective its Departmental economic authority. The Department took enforcement action against Yellow Air Taxi for violating 49 U.S.C. §§ 

### 41101 and 41712 by engaging in air transportation without effective economic authority during the period after its liability insurance had lapsed. The Department also initiated an investigation in 2010 ofYellow Air Taxi's website advertising practices, concerning alleged violation of 14 CFR 399.84, the Department's full-fare advertising rules and the related statutory requirement, 49 U.S.C. § 41712, which prohibits unfair and deceptive practices and unfair methods ofcompetition. Further, because ofthe continued and serious nature ofthe carrier's violations under Christopher Belmam's control, we are also seeking to prohibit Christopher Behnam personally for a period of5 years from holding a managerial position with or an ownership stake in any catTier, foreign air canier, or any other entity directly engaged or seeking to engage in air transportation. This notice and the attached complaint will be served on Yellow Air Taxi and Christopher Behnam. Under Rule 408 ofthe Depatiment's Rules ofPractice, 14 CFR § 302.408, Yellow Air Taxi and Christopher Behnam are required to file, within 15 days, an answer to the complaint admitting or denying specifl.cally and in detail each allegation ofthe complaint, and a response to the proposed assessment of civil penalties, specifically presenting any matters the respondent intends to rely on in oppositionto or in mitigation ofsuch civil penalties.

SAMUEL PODBERESKY

### ~~**~-** Assistant General Counsel for Aviation Enforcement and Proceedings4

CERTIFICATE OF SERVICE I cetiify that on April3, 2013, the foregoing Notice of Enforcement Proceeding and Proposed Assessment ofCivil Penalties and the related Complaint was served on the Respondent by firstclass mail and cetiified mail-return receipt requested addressed to the Respondent's address: 2680 N.E. 24 Street, Pompano Beach, Florida 33064.

By: SAMUEL PODBERESKY Assistant General Counsel for Aviation Enforcement and Proceedings

,J

### !).~~**Lau~a Jen~1ings**  

## (ACVI./V'CJ...**~)Jfr---tjl** U Semor Tnal Attorney / Office ofAviationEnforce'ment

and Proceedings (202) 366-0966BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

Friendship Airways, Inc. d/b/a Yellow Air Taxi, and WASHINGTON, D. C.

ChristopherBehnam, Individually Violations of14 CFR Part 374 and 49 U.S.C. §§ 41101 and 41712 Enforcement Proceeding

ENFORCEMENT COMPLAINT Served April 3, 2013

DOT-OST 2013-0066

1. 

### During all times relevant in this complaint, Friendship Airways, Inc., d/b/a YellowAir Taxi (YellowAir Taxi) was an air taxi operator as defined by 14 CFR Part 382 with its principal place ofbusiness at 2680 N.E. 24 Street, Pompano Beach, Florida 33064. 2. YellowAir Taxi operated under the direction and control ofChristopher Behnam, the president and owner ofYellow Air Taxi. 3. In order to engage in air transportation as a direct or indirect air carrier, Yellow Air Taxi was requiredto hold economic authority at all times from the Department, either in the form ofa certificate ofpublic convenience and necessity issued pursuant to 49 U.S.C. § 41101, or in the fmm ofan exemption from the certificate requirement, such as the classifl.cation ofair taxi operators in 14 CFR Part 382. 4. According to the Federal AviationAdministration (FAA), Yellow Air Taxi ceased operations onMay 16, 2011, rendering its air taxi registration ineffective. 5. On August 15,2011, Yellow Air Taxi surrendered its air carrier certiflcate to the FAA. 6. On October 18,2011,the Department ofTransportation (Department) canceled Yellow Air Taxi's air taxi registration because it ceased operations. 7. As an air carrier, Yellow Air Taxi was subjectto the creditrefund requirements of Regulation Z ofthe Board ofGovernors ofthe Federal Reserve System, 15 U.S.C. §§ 

### 1601-1693r.2

8. 12 CFRPart 226 and 14 CFRPart 374, which implement Regulation Z, establishthat, withrespect to refund requests involving airline tickets purchased with a credit card, a creditor-here Yellow Air Taxi-musttransmit a credit statementfor a passengerrefund to the credit card issuer within seven business days ofreceipt offull documentation for the refund requested. 9. 49 U.S.C. § 41712 confers onthe Department authority to prohibit unfair and deceptive trade practices and unfair methods ofcompetition. 10. Between August 2010 and August 2011, Yellow Air Taxi failed inten instances, some of -which included purchases ofmultiple tickets, to process creditrefund requests within seven business days ofreceipt offull documentation for the refund requested. 11. BetweenAugust 2010 and October 2011, YellowAir Taxi failed entirely in seventeen instances, some ofwhich included purchases ofmultiple tickets, to process credit refund requests upon receipt offull documentation for the refund requested. 12. In at least one instance referred to inparagraph 11, above, the refund was due ontickets that Yellow Air Taxi sold to passengers after May 16,2011,the date it ceased operations. 13. Yellow Air Taxi's failure to process credit refunds entirely orwithinthe period required by Regulation Z constitutes a violations of 14 CFRPart 3 7 4 and is an unfair and deceptive practice in violation of49U.S.C. § 41712. 14. Yellow Air Taxi's sale, after the date it ceased operations, oftickets to passengers without the proper economic authority is in violation of49 U.S.C. § 41101 and constitutes an unfair and deceptive practice in violation of49 U.S.C. § 41712. 15. Upon information and**belief~** YellowAir Taxi is a "smallbusiness concern" as defined in section 3 ofthe Small Business Act, 15 U.S.C. § 632. As such, under 49 U.S.C. § 46301, the Departmentmay assess YellowAir Taxi and its principals civil penalties ofup to $2,500 for each violation ofthe Department's regulations or Title 49. Each day such violation continues is a separate violation. 16. Under 49 U.S.C. § 41712, the Department may, upon finding that a carrier is engaged in an unfair or deceptive trade practice or unfair method ofcompetition, issue an order directing the violator to cease and desist from such conduct. 17. Under 49 U.S.C. § 46101(a)(4), the Department may issue an order compelling compliance with provisions ofPart A, Subtitle VII ofTitle 49 U.S.C. and requirements prescribed under that Part, including 14 CFR Part 374 and 49 U.S.C. §§ 41101 and 41712.WHEREFORE, the OHice ofAviation Enforcement and Proceedings requests the Department of Transportationto: A. Findthat YellowAir Taxi, previously an air carrier, and Christopher Behnam, individually, have violated 14 CFRPart 374 byfailing to process creditrefund requests within the periodrequired by Regulation Z ofthe Board ofGovernors ofthe Federal Reserve System, 15 U.S.C. §§ 1601-1693r and 12 CFRPart 226; B. Findthat Yellow Air Taxi and Christopher Behnam, by engaging inthe conduct described inparagraphA, above, and by selling tickets afterthe date Yellow Air Taxi ceased operations, have engaged in an unfair and deceptive trade practice and unfair method ofcompetitionthereby violating 49 U.S.C. § 41712; C. Findthat Yellow Air Taxi and Christopher Behnam, by selling tickets after the date YellowAir Taxi ceased operations, engaged in airtransportation without the proper economic authority and thereby violated 49 U.S.C. § 41101. D. Order Yellow Air Taxi and ChristopherBehnam, individually, andtheirrespective successors and assigns, to cease and desist from violating 14 CFRPart 374 and 49 U.S.C. §§ 41101 and 41712 by engaging in the conduct described in paragraphs A, B, and C, above; E. Assess civil penalties against YellowAirTaxi and Christopher Behnam,jointly and severally, of$67,500 for the violations described inparagraphs A and B, above, and $2,500 for each similar violation revealed inthe course ofthis investigationpursuantto 49 U.S.C. § 46301; F. Order Christopher Behnampersonally to cease and desist for a period of5 years from holding a managerial positionwith or an ownership stake in any carrier, foreign air carrier, or any other entity directly engaged or seekingto engage in airtransportation. G. Orderthat each**y~ar** up to and including 5 years from the date ofthis complaint, within 7 days ofthe anniversary ofthis complaint, Christopher Behnam shall certify to the Office ofAviation Enforcement and Proceedingsthat he has complied with ordering paragraphs D and F, above, during the preceding year. The certification shall be inthe form.ofa written declaration swornunderpenalty ofperjury in accordance with 28 U.S.C. § 1746; and

## .. ' , 4

H. Grant suchother reliefas may be appropriate.

# ~ Assistant General Counsel

Aviation EnforcementandProceedings 

# ,/**a~--** 'i"C/,**~L ·~~'** **~**

# iaur:~enning/ Senior Attorney Oflice ofAviation Enforcement and

Proceedings (202) 366-0966