A move by the DOJ to seize two jets worth $28M has been challenged by Island Air Capital, which claims the planes belonged to it.
Two luxury planes allegedly owned by Sam Bankman-Fried (SBF), the ex-CEO of the fallen crypto exchange but never utilized.
The ex-FTX chief may relinquish as United States prosecutors aim to reclaim assets in the current legal proceedings.
Luxury Jets Listed in Bankman-Fried Assets
The two jets include an Embraer Legacy EMB-135J, whose registration number is C6-BDE, and a Bombardier Global 5000 BD-700-11A11, whose registration number is N410AT. A Wednesday Department of Justice (DOJ) filing shows they are mentioned as part of SBF’s assets.
In August, FTX debtors claimed the planes’ ownership, with Bombardier Global in the government’s custody since February. Nevertheless, the Island Air Capital (IAC), a charter flight operator based in Bahama, argued against the ownership. It asserts that it used funds offered by FTX to purchase the jets for $12.5M and $15.9M, respectively.
This disagreement concerns whether the airplanes were bought using funds acquired via supposed deceitful activities, as the government claims, or if FTX possesses genuine ownership claims on alleged credits that funded the acquisitions.
A September 21 filing submitted by IAC to the United States bankruptcy court in Delaware shows that the charter flight operator owns the Legacy and the Global, two aircraft bought using funds offered by FTX. Additionally, the Aircraft Loan was in an unsecured, no-interest loan form. It was approved via a handshake deal between SBF, FTX’s then-chief executive officer, and Mr. Aranha, IAC’s beneficial owner.
According to the court filings, the purchases occurred in March 2022 and August 2022, respectively.
IAC Considers Questioning FTX Funds’ Source Unnecessary
IAC asserts that Aranga acquired permission from FTX for the two plane’s purchase. The deposits came from North Dimension and Alameda Research and were transferred directly into escrow. Further, the firm said that Aranha ‘was ignorant’ and lacked reason to be skeptical about the fraud happening at FTX. The court filing also showed he lacked a reason to question the origin of funds utilized by FTX to fund the aircraft.
The IAC owner is considered one of the biggest Bahamian victims of the cryptocurrency found linked to Sam Bankman-Fried. After the collapse of FTX, the Embraer Legacy jet was returned to the Bahamas for use, and steps were followed to dispose of the Bombardier Global and later utilize the earnings to pay back the overdue aircraft loan.
AIC asserted it has acquired ‘several offers for the Global amounting to more than 15M.’ Nevertheless, the sales and marketing efforts experienced interruption following Global’s seizure by the United States Marshals Service on February 8 this year.
Airplane Tracking Shows Private Ownership
The two aircraft are listed by Flightradar24, an airplane tracking service, as having ‘private’ owners. It is indicated they were never utilized by people linked to FTX since they were still undergoing upgrades when the firm filed for insolvency in November last year. Additionally, the IAC requested to establish who will fund inspections and ongoing repairs as the dispute is addressed.
Court documents show that Aranha had told the liquidators appointed by the Supreme Court about his plan to operate the Legacy and dispose of the Global to repay the pending aircraft loan.
The current development happens as Bankman-Fried’s trial started in New York on Tuesday, with the fallen crypto entrepreneur encountering charges associated with swindling FTX clients, which includes securities fraud, money laundering, and wire fraud accusations.
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