Floyd Stilwell Enjoys Fortune From Aircraft-Parts Deal as Venezuelan Colonel Goes to Prison

A Venezuelan Air Force colonel is going to prison for 19 months in an illegal airplane-parts deal that netted a Phoenix man about $1.5 million.

As New Times reported in May, Floyd Stilwell, a former principal of Marsh Aviation in Mesa, received probation and a $250,000 fine for his significant role in the scheme to sell upgraded parts to the Venezuelan military.

But the fine is small potatoes compared to the $1.8 million Stilwell personally made on the deal.

See also: - Floyd Stilwell Gets $250,000 Fine for Upgrading Airplane Engines for Venezuelan Air Force; Former Exec With Mesa's Marsh Aviation Keeps Money Made in Deal

Stilwell's attorney, Walter Nash, confirmed for New Times back in May that Stilwell is allowed to keep the bulk of the profit.

Keeping other Marsh executives in the dark, Stilwell entered into negotiations in the mid-2000s with representatives of the Venezuelan Air Force, including Guiseppe Luciano Menegazzo-Carrasquel. The project involved upgrading six aging T-76 engines that the Venezuelans wanted to install in OV-10 Bronco light attack turboprop aircraft. As we reported in May:

After the Venezuelan arms embargo went into effect in June of 2006, Stilwell changed the contract to indicate -- falsely -- that the engines were a civilian variety of the T-76, the plea agreement states. Stilwell With the help of two liaisons he hired to help him deal with the Venezuelans, four of the upgraded engines were disassembled and shipped in boxes mislabeled as non-military gear to Florida, and then on to Stilwell's military contacts in Valencia, Venezuela.

The Arizona U.S. Attorney's Office apparently felt sorry for Stilwell, who is nearly 90 and with health problems, and offered him a plea agreement that didn't include prison. According to Nash, the airplane-parts deal was legit when the parties entered into it before the arms embargo. The criminal charges against Stilwell stemmed from two "specific actions" that violated the arms embargo, Nash explained, not the overall deal.

Still, it's not very clear to us -- and perhaps not to you, either -- how Stilwell got to keep all that money. After all, this is the same U.S. Attorney's Office that last year seized a helicopter from Oklahoma ad-man Bill Stokley for altering his tail-rotor number.

The indictment of Menegazzo-Carrasquel shows that his involvement was significant -- and so was Stilwell's. Notice that the part of the indictment that lists the "overt acts" of conspiracy begin with Floyd Stilwell's changing of the original contract. A man named Roy Wayne Roby acted as Stilwell's "exclusive" agent in the deal. Menegazzo-Carrasquel and another Venezuelan, Oscar Rafael Colmenarez Villalobos, had four of the engines shipped to South America from Miama, Florida, in 2007 after they were upgraded at Marsh Aviation.

Roby and Villalobos are still living in Venezuela, officials say, and are wanted in this country. Menegazzo-Carrasquel, for some reason, flew to Houston from Caracas in 2012 using his Italian passport, and was arrested. Today, U.S. District Judge Murray Snow sentenced him to 19 months in prison.

The colonel will be subject to three years' supervision and a $100 fine when he gets out -- which maybe Stilwell would be gracious enough to help him pay.

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.