Bankrupt charter operator in Honolulu faces multi-million dollar fraud allegations

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Wing Spirit, the Honolulu charter operator who announced a donation of $ 1 million in flights to help Oahu doctors access patients on neighboring islands during the height of the COVID-19 pandemic, filed its six months after the free flight offer.

Although the October 2020 bankruptcy came at a time when the pandemic had plummeted the airline industry, a storm of lawsuits filed against the company and its CEO, alleging multi-million dollar fraud, points to a very different cause.

One of the main claims is that the CEO of the fledgling charter operator, Teijiro Handa, defrauded his business partner Japan-Aviation Academy, Japan’s oldest flight school, out of tens of millions of dollars, which he is believed to have used to launch Wing Spirit in 2019..

At the center of a flurry of lawsuits is Wing Spirit’s Teijiro Handa, accused of defrauding Japan’s oldest aviation school for tens of millions of dollars. Courtesy: Wing Spirit

In the October lawsuit in Hawaii’s Magistrates’ Court, Handa is accused of winning the trust of the president of the Japanese Flying Academy in order to take control of the company’s finances, ultimately forcing the academy to needlessly borrow a large sum of money from Japanese banks. . The lawsuit claims that Handa then paid himself some of that money to establish Wing Spirit in Honolulu.

As Wing Spirit took off, the Japanese Aviation Academy partnered with the University of Hawaii to build an aviation academy in Oahu.

The two entities signed a letter of intent setting out a five-year period for discussions to work together to create an academic program to nurture the next generation of pilots, mechanics, flight attendants and aviation engineers in Hawaii.

The Honolulus Economic Development Office saw the proposed venture as a chance to create a new industry with well-paying jobs after the 2015 closure of the University of Hawaii’s flight training program at Honolulu Community College.

Preliminary discussions were underway before the COVID-19 pandemic hit, said UH spokesman Dan Meisenzahl, but said the pandemic had put the project on hold.

Along with the UH initiative, the Japanese Flying Academy also registered in 2018 a new Hawaiian branch of its Japanese Aviation Academy of Hawaii. Handa was appointed chairman of the group.

Wing Spirit caused a sensation on the Hawaii aviation scene in 2019 when it pledged to purchase 15 state-of-the-art HondaJet Elite, with a base price of around $ 5 million each, for the service. of the company’s premium inter-island flight and ambulance flight.

The company marked the arrival of its first two Honda jets that summer with a donation of $ 300,000 to the city and county of Honolulu and a cocktail party at which the Japanese Consulate General in Honolulus, Koichi Ito, toast the future of Wing Spirits.

But the company ran out of funds to purchase the jets and resorted to leasing.

A week after Wing Spirit defaulted on a $ 441,000 per month loan to lease multiple Honda jets in October 2020, the company filed for Chapter 11 bankruptcy. The bankruptcy filing was then converted from Chapter 11, commonly used for business reorganizations, to a Chapter 7 liquidation filing.

Other lawsuits filed last year allege Wing Spirit never intended to pay the local companies it hired to design and furnish its terminal and offices. Two Honolulu contractors say the company owes a total of $ 200,000 for services rendered.

Lawyers representing Handa and Japan Aviation Academy did not respond to requests for comment.

The private high-speed jet charter service Wing Spirit offered $ 1 million in plane tickets to neighboring islands to medical workers and patients in Hawaii during the coronavirus crisis. Six months later, the company filed for bankruptcy. Courtesy: Wing Spirit

Wing Spirits’ notable donation of $ 1 million in flights for patients and staff at The Queens Health Systems, Hawaii Pacific Health and Kaiser Permanente, was aimed at improving the capacity of hospital beds during the coronavirus outbreak in streamlining the patient discharge process.

The program, which lasted for April 2020, also aimed to allow doctors to travel to neighboring islands with more flexibility given the virus-related reduction in the number of inter-island commercial flights.

But it is not known how widely the program has been used.

A group of orthopedic surgeons from Queens Medical Center used the free flights from Oahu to the Big Island to treat patients at the North Hawaii Community Hospital in Waimea.

Queen’s Health System Chief Medical Officer Dr Whitney Limm said the program gave doctors the option of flying at a time of their choosing and directly to and from the hospital.

But he said no other Queen’s doctor outside of the orthopedic group has used it, likely because the sudden adoption of telehealth during the pandemic has allowed many doctors to treat their patients remotely.

“I think orthopedics is one of those specialties where you can’t rely on telehealth,” he said. “The doctor must touch you and treat you.

A spokesperson for Hawaii Pacific Health was unable to say whether the medical system was using any of the free flights. A spokesperson for Kaiser did not return a request for comment.

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