Zephyr Aviation LLC, a Mineral, Virginia-based charter broker, and its owners Frederick Credno Jr. and Frederick W. Credno III agreed on November 14, 2025, to pay $3,901,000 to resolve allegations that they violated the False Claims Act by submitting inflated invoices to the Department of Homeland Security. The settlement addresses claims that the Mineral, Virginia company routinely billed Customs and Border Protection for flight hours that exceeded the actual flight times performed by subcontracted aircraft operators between 2022 and 2025.
The case represents the culmination of fraud allegations against a contractor that has operated in the deportation flight business since 2014, when Zephyr first secured contracts to transport Cuban nationals from Miami to Havana under agreements with Immigration and Customs Enforcement. Over the decade, the family-run business expanded its government aviation contracts significantly, securing a delivery order worth up to $3.5 million from CBP in November 2022. That contract formed the basis for the fraudulent billing scheme that the U.S. Department of Justice ultimately prosecuted.
The resolution was announced jointly by Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division, Inspector General Joseph V. Cuffari of the Department of Homeland Security Office of Inspector General, and Acting Assistant Commissioner Robert B. Danley of the Customs and Border Protection Office of Professional Responsibility. Trial Attorney Daniel W. Kastner of the Fraud Section handled the matter through a coordinated effort among multiple federal agencies. The government emphasized that “companies that do business with the government are expected to charge the United States accurately for the goods and services they provide,” while Inspector General Cuffari stated that “committing fraud in federal contracts will be met with significant sanctions against those defrauding the American taxpayer.”
The Broker Business Model and Billing Fraud Mechanics
Zephyr operates as an aircraft charter broker rather than a direct air carrier, a distinction critical to understanding the fraudulent billing scheme. The company’s own website explicitly states that “Zephyr Aviation, LLC is an aircraft charter broker and acts an agent for its customers in procuring aircraft” and that “Zephyr Aviation, LLC is not a direct air carrier or a licensed air carrier of any type.” This business model means Zephyr does not own or operate aircraft but instead arranges for certificated direct air carriers to perform actual flights.
Under the CBP contracts at issue, Zephyr chartered flights to transport persons in CBP custody. The company subcontracted with various aircraft operators who actually flew the required missions. Zephyr then submitted invoices to CBP purportedly based on required flight times. The government’s allegations centered on a systematic pattern: Zephyr routinely submitted invoices requesting payment for flight hours that exceeded the actual flight times logged by the aircraft operators performing the work.
This billing structure created opportunities for inflation that the Crednos allegedly exploited. Because Zephyr acted as middleman between the government and actual operators, the company controlled the invoicing while subcontractors controlled the actual flight logs. The government alleged that Zephyr requested payment for hours that were never flown, effectively charging taxpayers for phantom flight time while pocketing the difference between what they billed CBP and what they paid subcontractors.
A Family Business Built on Deportation Contracts
The Crednos have operated Zephyr as a family enterprise, with contracting data identifying both Chip Credno and Fred Credno running the business. The company established its deportation flight operations in July 2014 when ICE first contracted with Zephyr to transport Cuban nationals from Miami to Havana. Through two contracts between 2014 and 2017, Zephyr earned $98,300 from these deportation flights.
The business expanded substantially after the 2016 election. In 2017, with the Trump administration implementing aggressive immigration enforcement policies, Zephyr signed a new ICE contract worth up to $347,636 for Cuba deportation flights, representing more than a threefold increase over previous contracts. By 2022, Zephyr had secured the CBP delivery order worth up to $3.5 million that became the focus of the fraud investigation.
Zephyr markets itself as having “over 50 years in the aviation and airline industry” with management claiming “a proven record of successful charter operations.” The company’s client list includes multiple federal agencies: USAID, Department of the Navy, United States Capitol Police, Department of State, Department of Commerce, FEMA, Department of Homeland Security, ICE, and NASA. This extensive government contracting history makes the fraudulent billing allegations particularly significant, as they suggest systematic overcharging across a relationship spanning more than a decade.
The False Claims Act and Government Contractor Accountability
The False Claims Act imposes civil liability on individuals and companies that knowingly submit false claims for payment to the federal government. The statute includes provisions allowing the government to recover triple damages plus penalties, though settlements typically resolve for lesser amounts. The $3.9 million settlement represents a significant financial consequence, though the Justice Department emphasized that “the claims resolved by the settlement are allegations only and there has been no determination of liability.”
The investigation required coordination among the Justice Department’s Civil Division Commercial Litigation Branch Fraud Section, U.S. Customs and Border Protection, and the DHS Office of Inspector General. This multi-agency approach reflects the government’s increasing focus on contractor fraud, particularly in immigration enforcement operations that have seen dramatic budget increases over the past decade.
Inspector General Cuffari’s statement accompanying the settlement announcement emphasized the accountability message: “With this settlement, we are sending a clear message that committing fraud in federal contracts will be met with significant sanctions against those defrauding the American taxpayer.” Acting Assistant Commissioner Danley added that “this settlement reaffirms our duty to protect taxpayers and hold accountable those who take advantage of our government programs.”
Deportation Flight Industry and Contractor Oversight
Zephyr operates within a larger ecosystem of companies profiting from immigration detention and deportation operations. ICE Air Operations facilitates alien transfers and removals through both chartered flights and commercial airlines. The primary subcontractors include companies like Swift Air and World Atlantic Airlines, though numerous smaller operators and brokers participate in the system. According to federal contracting data, companies like GEO Group hold nearly half a billion dollars in ICE contracts, dwarfing smaller operators like Zephyr.
The deportation flight business has faced scrutiny regarding both human rights concerns and contractor oversight. A 2015 DHS Office of Inspector General audit concluded that ICE maintained sloppy recordkeeping, routinely concealed records from public disclosure under FOIA, and failed to provide information to Congress even when legally mandated. The charter broker model employed by Zephyr adds additional complexity to oversight, as it introduces a middleman between the government and actual service providers, creating opportunities for billing discrepancies.
The November 2022 CBP contract that became the basis for fraud allegations came during a period of increased immigration enforcement activity. Between 2022 and 2025, CBP transported thousands of persons in custody using contracted aviation services. The government’s discovery that Zephyr was billing for flight hours exceeding actual operator logs suggests that oversight mechanisms failed to catch the discrepancies until investigators conducted detailed audits comparing invoices against subcontractor records.
Conclusion
Frederick Credno Jr. and Frederick W. Credno III built Zephyr Aviation into a profitable government contractor over eleven years, specializing in deportation flights for federal immigration agencies. Their decision to systematically inflate invoices by billing for more flight hours than subcontractors actually flew represents a calculated fraud scheme that allegedly extracted millions from taxpayers. The $3.9 million settlement resolves the allegations without admission of liability, allowing the Crednos to avoid further litigation while CBP and DHS confront questions about how contractor billing fraud persisted undetected across multiple years of operations.
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