Continental Accuses Pilots Of Pension Scam


Continental Airlines says nine of its senior pilots divorced their spouses so they could collect early settlements of up to $900,000 from the airline’s pension fund, and later got remarried. Continental says the divorces were intended only to secure the cash long before the pilots normally would have been eligible, but at least one of those accused told ABC News that her divorce and later reconciliation were not falsified. Cindy Ernst said her divorce was real, and her reconciliation was none of the airline’s business. Another pilot, Jay Ellis, told the Associated Press: “We were divorced — that’s legal and aboveboard. They can say what they want, but a judge signed ours.”

Continental said in its lawsuit that the divorces were “subterfuges or sham transactions” that were motivated solely by a desire to obtain lump-sum distributions from their pension funds. One of the accused pilots agreed to repay the money and kept his job, but the others have all been fired or resigned. Continental alleges that the pilots continued to live with their spouses after divorcing and concealed the divorce from friends and relatives. Pilots at other airlines have lost much of their pension after their employers declared bankruptcy, and Continental said that a fear of similar losses may have motivated the pilots to attempt to get the early payout.