Convicted stock swindler Al Palagonia has reinvented himself as
the private jet broker of choice for top athletes

By Devin Leonard
     May 3 (Bloomberg BusinessWeek) -- The annual National
Basketball Association All-Star Game isn’t taken too seriously by
basketball fans. It’s best appreciated as the culmination of a
weekend of parties attended by athletes and their celebrity
friends. Before the most recent competition on Feb. 26 at the
Amway Center in Orlando, the players mingle beside the court with
director Spike Lee and civil rights activist Jesse Jackson.
Rapper-turned-actor Common visits Cee Lo Green. Their younger
peers, Lil Wayne and his protégé, Drake, make faces for TNT’s
cameras.
     In the midst of this revelry, Al Palagonia, a fast-talking
private jet broker with a thick Queens accent, is hustling. “Hey,
Deron,” he calls out to New Jersey Nets point guard Deron
Williams, who stops shooting baskets and trots over to discuss
his flight home to the Garden State after the game. Palagonia
speaks to Oklahoma City Thunder forward Kevin Durant about the
food on his post-game jet. And he huddles with Philadelphia 76ers
forward Andre Iguodala. “I got his new phone number,” Palagonia
says afterward. “These guys are always changing their phone
numbers.”
     A convicted stock swindler, Palagonia, 45, helped found
Apollo Jets, which has become one of the industry’s
fastest-growing jet brokers, due largely to Palagonia’s approach:
He uses jocks to lure suits. “My entire business model revolves
around sports,” he explains. “I do business with a lot of
athletes. Then you have the big wealthy business guy, spending
half a million a year on front row seats. He doesn’t have any
access to the players. But I do.”
     Apollo’s clients pay dearly for these privileges. A one-way
trip from New York to Los Angeles costs anywhere from $18,000 to
$25,000 depending on the size of the plane. Palagonia says the
privately held company books about 4,000 flights a year. He also
gets his clients choice seats at games and arranges for his
nonathlete customers to spend quality time with his friends and
clients from the sports world, including Pittsburgh Steelers
quarterback Ben Roethlisberger, Philadelphia Phillies first
baseman Ryan Howard, and retired NBA all-star Shaquille O’Neal.
“He has an affinity for professional athletes,” O’Neal says of
Palagonia. “He loves sports, and he speaks their language.”
Palagonia says he sometimes flies O’Neal for free or offers him
discounts for referring his former teammates.
     Private jet charter brokers have been around for several
decades. They don’t own any jets themselves. Rather, they book
flights on other people’s airplanes when their owners aren’t
using them. Brokers say this enables them to charge much less
than a company such as NetJets that offers fractional ownership
of private jets. Using a charter broker, says David McCown, “is
the most cost-effective way to fly private.” McCown is chairman
of the Air Charter Association of North America and senior vice
president of Air Partner, a private jet brokerage headquartered
in Florida. “It’s pay as you go.” McCown says there are about 30
full-time charter brokers in the U.S., but that doesn’t count the
concierges and limo companies that also offer the service.
     People who use private jet brokers do so at their own risk.
The business is largely unregulated. “All you need is a computer
and a cell phone to become a private jet charter broker,” says
James Wynbrandt, who covers the industry for Business Jet
Traveler magazine. In the last decade it’s been inundated by
former investment bankers, venture capitalists, and even a
Manhattan steakhouse owner. Palagonia warns customers: “There are
a lot of people with checkered pasts in this business—like me.”
     The son of a sanitation worker, Palagonia grew up in the
Ozone Park section of Queens. His uncle drove a limo for I.W.
Burnham, a founder of Drexel Burnham Lambert, junk-bond king
Michael Milken’s old firm. It was through this connection in 1984
that Palagonia landed his first financial industry job,
cold-calling potential customers at the investment bank. Six
years later he joined D.H. Blair, a boiler room notorious for
peddling initial public offering shares in sketchy little
companies. He became one of the firm’s top producers, making
$1 million a month in commissions. “He is one of the most
talented retail stockbrokers who has ever wielded a telephone
handset,” author Joshua Brown writes in Backstage Wall Street ,
an exposé of the brokerage industry published in March. “Some say
he had a shower and a bed installed in his office so that while
he was putting away shares in hot deals, he’d never have to leave
his phone.” Palagonia says the accounts are exaggerated: “I
wanted to, but they wouldn’t let me. … I worked harder than
anybody else. That’s what I do. I used to come into the office at
5 a.m. and I’d stay until 10, 11 almost every night.”
     With his new Wall Street wealth, Palagonia indulged his
passion for basketball. He followed his beloved New York Knicks
around the country and befriended team mascot Spike Lee at a game
in Chicago in 1992. “He had better seats than me,” Lee recalls.
“He gave me his card and said, ‘I’ll get you better seats.’ ” Lee
was so taken with Palagonia that he cast him in his 1998 film He
Got Game as a sports agent who dangles a platinum Rolex under the
nose of high school basketball prospect, Jesus Shuttlesworth
(played by real-life NBA star Ray Allen). “A lot of NBA players
recognize me from that,” Palagonia says proudly. He has appeared
in seven other Spike Lee movies.
     In 2000, Palagonia was indicted for taking part in a
pump-and-dump scheme along with members of New York’s Gambino and
Colombo families (whom he says he never met until they shared a
holding cell). He pleaded guilty to securities fraud and
enterprise corruption and spent 24 months in prison. Palagonia
makes no excuses. “What I did, I did,” he says. “But that’s
something I’d rather not rehash.”
     A lot of friends disappeared while he was behind bars. Lee
was one of the few who stood by him. “Everybody makes mistakes,”
the director says. “Al’s my man. I wouldn’t just desert him.”
With the help of a former D.H. Blair colleague, Palagonia became
a private jet broker. He spent a year at Halcyon Jets before
departing to form his own company in 2008. He tells customers up
front that he is an ex-con.
     Palagonia spends much of NBA All-Star Weekend in Orlando
with his headset on, coordinating flights on his BlackBerry. When
he isn’t on the phone, he’s shepherding his clients and their
families to various NBA-related events. On Friday night he
arrives early at his luxury box at the Amway Center to greet his
clients. There is an affordable housing developer from Long
Island who is reluctant to be named. They’re joined by sports
agent Roger Montgomery, who represents New York Knicks star
Jeremy Lin. The jet broker is eager to get to know the agent.
“Six months from now it will be like I’ve known him for 10
years,” Palagonia confides.
     The next morning, Palagonia plays a surprisingly aggressive
game of pickup ball at the hotel with sons of his clients,
shoving them and accusing them of committing numerous fouls.
After breakfast, he takes a larger group of customers to visit
O’Neal at his palatial Orlando home. The sports legend signs
jerseys and poses for pictures. Palagonia entertains everybody
with a story about the difficulty he has getting small planes for
the 7-foot-1 O’Neal.
     On Sunday evening, he takes in the All-Star game courtside
with Lee. Afterward he hurries to one of Orlando’s small
airports, where a dozen jets await to transport his clients home.
One by one, Palagonia sees them off. Steven Jomides, the owner of
a large New Jersey landscaping company, is one of the last to
depart. He’s happy to wait. The broker has arranged for Jomides
and his family to share a jet with Jeremy Lin and his Knicks
co-star Carmelo Anthony. “I’m still sleep-deprived,” Jomides says
a week later. “We didn’t get home until 4 a.m. You can’t put a
price tag on something like that.”