Daniel Preston, co-founder and CEO of Luminati Aerospace, was fired by his former aerospace company for alleged fraud, according to a lawsuit filed in 2009.
Preston, who holds himself out as a successful aeronautical engineer, inventor and entrepreneur who founded, grew and sold Atair Aerospace, was fired by that company in July 2009, according to the lawsuit. He was terminated after company executives discovered that a purported employment offer Preston used to procure a $50,000 raise and a lump-sum payment of more than half a million dollars from Atair was a fake, according to the complaint.
Luminati Aerospace, founded by Preston in 2015, is seeking to buy a 1,400-acre tract of land in the Calverton Enterprise Park from the Town of Riverhead for $40 million. Preston says his company will bring the defense aerospace industry back to the site where Grumman once manufactured fighter jets for the U.S. Navy. He says Luminati will eventually create as many as 2,000 jobs at the site. The town can sell land in the designated urban renewal zone at the enterprise park at a price below market value in order to spur economic development and job creation. The town board must first make a determination that Luminati is a “qualified and eligible sponsor” for the purchase.
Preston’s aerospace industry experience is largely connected to his eight-year tenure with Atair, a 2001 startup Preston founded to develop advanced guided parachutes — a subject he took an interest in after a skydiving incident in which he reportedly broke his neck. Within a few years, Preston raised capital from angel investors including billionaire investor William Conway, who bought a controlling interest in Atair. Preston, a minority shareholder, was employed as president, CEO and chief technology officer pursuant to a March 1, 2005 employment agreement. He was paid an annual salary of $175,000, according to that agreement.
But “differences and disagreements arose between Defendant Preston and certain other officers, directors and shareholders” of Atair, according to the complaint in the lawsuit. The differences were resolved by negotiations resulting in Preston resigning as CEO and continuing his employment as chief technology officer, according to the complaint.
During the course of those negotiations, Preston, through his attorney, claimed to have an employment offer that would pay him $525,000 per year, according to the complaint. Atair eventually agreed to pay Preston $225,000 per year and a lump-sum payment of $530,000 to keep him employed at Atair. The company and Preston signed a revised employment agreement reciting the new terms in March 2008.
In July 2009, Atair claims it “inadvertently discovered” emails between Preston and the CEO of an architectural hardware company showing that Preston’s purported employment offer was fake.
In a Feb. 1, 2008 email to Rhett Butler, CEO of E.R. Butler & Co., Preston referenced his negotiations with his partners at Atair, who he said were “insisting to see” his offer letter. He then asked Butler for help.
“Would you be willing to put the attached letter on your company letterhead, send it back to me today and let me send it to my attorney?” Preston wrote in the email, which was attached to the complaint. “It would of course be a rouse [sic], but it is required because my attorney will of course not lie.”
According to the complaint, Butler complied with the request from Preston, who used his company email account for the correspondence.
Atair relied on the false letter in agreeing to raise Preston’s salary from $175,000 to $225,000 per year and in agreeing to immediately pay him $530,000, the company said in the complaint. After the email discovery, Atair terminated Preston’s employment. He was removed from the company’s board of directors the following month.
Atair brought suit against Preston, Butler and E.R. Butler in State Supreme Court in New York County in September 2009, seeking compensatory and punitive damages. Butler and his company filed a motion to dismiss the suit against them, arguing that Atair failed to state a cause of action against them. Preston filed no answer to the complaint or motion to dismiss it, according to court records. The parties settled the suit and in April 2010 entered into a stipulation of dismissal. The terms of the settlement were not made part of the public record.
Atair continued in business after Preston’s departure and was reportedly sold to Argon ST, a wholly owned subsidiary of Boeing.
In a March interview, Preston told RiverheadLOCAL Atair “was sold to Argon and Boeing” and that he had now “reacquired that company in order to get my intellectual property back” because “some of my older patents are required for what we’re doing [at Luminati].” Numerous media outlets — including Bloomberg Businessweek and The Washington Post — have also reported that Preston sold the company in 2009.
Preston did not respond to a request for comment for this story. His spokesperson has not responded to repeated requests for comment since June 17.
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