The investor tied to the rapid growth of Flair Airlines, Joshua Wander, is facing serious legal challenges. He has been charged with defrauding investors and lenders out of US$500 million through securities and wire fraud in New York.
Overview of the Charges Against Joshua Wander
Joshua Wander, cofounder of 777 Partners, surrendered to authorities recently. At 44 years old, he is accused of misleading investors and lenders by falsifying bank records and misrepresenting the financial status of his firm. U.S. Attorney Jay Clayton asserted that Wander borrowed funds against non-existent assets, leading to substantial financial losses.
Details of Allegations
- Wander allegedly embezzled funds for risky ventures, including investments in soccer teams and airlines.
- The charges have not yet been proven in a court of law.
- Wander’s attorney claims these are mere business disputes and looks forward to a trial.
Wander’s case is further complicated by the involvement of Damien Alfalla, the former CFO of 777 Partners, who has pleaded guilty and is cooperating with federal authorities.
Background on 777 Partners
Founded to acquire structured settlements, 777 Partners transitioned to riskier investments around 2018. Their portfolio included Flair Airlines, Bonza Airlines of Australia, and partnerships in European soccer clubs like Sevilla FC and Genoa CFC. A notable attempt to purchase Everton Football Club was unsuccessful last year.
As 777 Partners faced mounting losses, they reportedly borrowed US$350 million against assets already pledged to other lenders. According to the FBI, this created a facade of stability masking significant financial woes.
Consequences of Financial Mismanagement
The implications of these financial missteps have been severe. A British court declared 777 Partners bankrupt in 2024. Despite the turmoil, the FBI highlighted the ongoing debts incurred by 777 Partners.
Flair Airlines’ Position
Flair Airlines, a discount airline operating 14 Boeing 737s, was significantly supported by 777 Partners, which owned 25% of the airline since 2019. This partnership facilitated Flair’s expansion, increasing its fleet to 18 aircraft by 2021, with ambitions for 60.
However, as 777 Partners faced scrutiny, it reduced its share in Flair to below 10% by May 2024. Eric Tanner, Flair’s chief commercial officer, asserted that Flair no longer has any ties or outstanding debts to 777 Partners.
Regulatory Scrutiny
The Canadian Transportation Agency took note of 777 Partners’ influence over Flair Airlines, which led to regulatory concerns. Flair managed to maintain its operational license after mitigating 777’s control. Despite these efforts, Flair continued to face difficulties, including lease seizures for unpaid rent.
In 2023, the Canadian government secured a court order to seize Flair assets, seeking to recover over $67 million in unpaid taxes. Ultimately, the two parties reached a payment arrangement.
