Atwater flight school under IRS criminal probe

Federal investigators descended on an Atwater flight school Monday morning as part of a criminal investigation led by the Treasury Department.

The Sierra Academy of Aeronautics, a school that specializes in training commercial pilots for several Asian air carriers, is the subject of an investigation by the Internal Revenue Service, according to Arlette Lee, a special agent with the Treasury Department. Lee declined to elaborate.

Investigators traveling in at least six vehicles arrived at the school, located at the former Castle Air Force Base. Several agents were seen entering the Sierra Air Simulator Training Center.

School officials did not respond to requests for comment Monday.

The Sierra Academy of Aeronautics, which also operates as KS Aviation, was purchased by John Yoon in 2003, according to the school’s website, which also says it has been the exclusive provider of cadet training for Korean Airlines for at least 13 years.

A co-owner of the school, Daniel Yoon is the subject of felony criminal charges filed by the Merced County District Attorney’s Office on Jan. 13.

The case, which is unrelated to the IRS probe, accuses Daniel Yoon of falsifying loan documents, Deputy District Attorney Walter Wall confirmed Monday in an interview with the Sun-Star.

The 66-year-old Daniel Yoon is charged with two counts of falsification of corporate records and two counts of forgery, according to Merced County Superior Court records.

Prosecutors believe Yoon applied for a loan through KS Aviation, one of three corporations associated with the flight school. Yoon, however, allegedly used the name of John Yoon, his business partner, on documents certifying the loan.

Prosecutors said Daniel Yoon and John Yoon are not related to one another other than being business partners.

A warrant was issued for the arrest of Daniel Yoon, but, as of Monday afternoon, he was not in custody at the Merced County Jail, according to county records.

Daniel Yoon also is being sued by John Yoon in a battle over control of the flight school, which was established in Oakland and moved to Castle in 2004.

According to John Yoon’s attorney, Vincent Kim, John Yoon and Daniel Yoon initially each owned 50 percent of the company. However, John Yoon claims that while he was hospitalized in June 2013 after a motorcycle crash, Daniel Yoon tried to wrestle away control of the company. The suit claims John Yoon was unable to return to work for about seven months.

Daniel Yoon’s attorney, Cyril Lawrence, did not return a message left for him late Monday afternoon.

John Yoon’s lawsuit was filed in June 2015. A hearing is set for March 21 in Merced County Superior Court.

In the lawsuit, John Yoon claims that Daniel Yoon promoted himself from CFO to CEO, forged John Yoon’s name on a loan application, appointed new members to the board of directors, and increased the number of stock shares in his name “without shareholders’ consent or knowledge, or the Board of Directors’ approval.”

The suit accuses Daniel Yoon of “systematic looting,” saying he used the company as his “own personal piggy bank.” The suit says those alleged actions exposed the company to “numerous safety issues, tax evasion issues, and threats to its cash flow” and the company’s “very existence.”

The suit cites unrelated cases as examples of Daniel Yoon’s alleged mismanagement, including a pregnancy discrimination claim and allegations of labor code violations.

“Thus, the picture that emerges of Dan Yoon is that of a tyrannical boss,” the suit claims.

The pregnancy discrimination case, filed by the U.S. Equal Employment Opportunity Commission, was settled in September. A company mechanic claimed she was fired for being pregnant. According to John Yoon’s lawsuit, the settlement cost the flight school more than $100,000.

Kim said his client is hoping to have Daniel Yoon removed from the company and that John Yoon will be named CEO. His client is also seeking unspecified financial damages from Daniel Yoon.

This story was originally published January 25, 2016 at 12:52 PM with the headline "Atwater flight school under IRS criminal probe."