The Miami investor whose financing fuelled the rapid expansion of Edmonton-based Flair Airlines in 2021 has pleaded guilty to fraud charges in the United States, in a scheme prosecutors say cost investors and lenders hundreds of millions of dollars.
Joshua Wander, co-founder and former chief executive of 777 Partners, agreed to forfeit US$500-million as part of his plea to wire fraud and securities fraud charges, according to the United States Attorney for the Southern District of New York. Each charge carries a maximum sentence of 20 years in prison. Wander is scheduled to be sentenced on March 1.
U.S. Attorney Jamie McDonald said Wander “used his company, 777 Partners, to steal hundreds of millions of dollars from private creditors and investors.” Prosecutors said he defrauded victims by pledging the same assets to multiple lenders, fabricating assets, misrepresenting 777 Partners’ financial condition and creating falsified bank statements.
How the Money Was Used
According to the U.S. Attorney, Wander directed the misappropriated funds toward uses his lenders never authorized, including covering costs for 777 Partners’ portfolio of professional soccer clubs. Prosecutors said that over time, Wander expanded into new sectors including airlines and sports teams.
777 Partners began as an underwriter and financier of structured insurance settlements but started borrowing to fund acquisitions outside that business. Because the company lacked the money to pay for these deals, Wander drew on restricted funds from its insurance operations, the U.S. Attorney said, pledging hundreds of millions of dollars in structured settlement assets that the firm either had never purchased or had already pledged to other lenders. Employees were then told to falsify bank statements to conceal the scheme, prosecutors said.
Wander’s investments included Flair Airlines, Australia’s Bonza airline, streaming services, and European soccer clubs Sevilla FC and Genoa CFC. A bid by the firm to acquire Everton Football Club of England’s Premier League fell through two years ago.
Flair’s Rapid Expansion and Fallout
777 Partners acquired a 25-per-cent stake in privately held Flair in 2019 and went on to lease 13 new Boeing 737 Max aircraft to the carrier, with stated plans to build a fleet of 50 planes. With Wander and two other 777 Partners executives controlling Flair’s board, the airline launched an aggressive expansion of routes across Canada and the United States.
The firm reduced its stake in Flair to less than 10 per cent in 2024 as Wander’s legal and financial troubles deepened. Flair spokeswoman Kim Bowie said the airline has had no business relationship with 777 Partners for more than a year and is “in no position to comment on 777 or its principals.”
In 2022, the Canadian Transportation Agency investigated 777 Partners’ involvement with Flair, alleging the foreign investor was exerting control over the airline in violation of Canadian law. Flair retained its operating licence after agreeing to reduce its reliance on 777 Partners’ financing and plane leases and to add more Canadians to its board.
By 2023, prosecutors said, the scheme began unravelling after a lender accused Wander of pledging the same assets twice as collateral — an issue he attributed variously to a computer error and an inadvertent mistake. Around the same time, an aircraft leasing company seized four of Flair’s 19 passenger planes over late payments in Edmonton, Toronto and Waterloo, Ont.
Tax Dispute Resurfaced in 2024
Flair’s financial difficulties resurfaced in 2024 when the federal government obtained a court order to seize and sell the airline’s property to recover more than $67-million in unpaid taxes. The dispute was tied to the import of 20 Boeing 737 Max aircraft beginning in 2021, the same period in which Wander was driving the airline’s expansion. The airline settled the matter by agreeing to a payment plan for the taxes owed.
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