Lawsuit against Jet 1 alleges fraud

A Palm Beach luxury club is suing the troubled Jet 1 Charter Inc., alleging the Naples charter company fraudulently leased it a plane that was repeatedly grounded due to problems.

But Jet 1 owner Scott Phillips branded the matter a contractual dispute, saying he grounded the plane because Legacy Club didn’t pay its bills. He called the lawsuit’s allegations false and said Legacy Club’s founders, who both have past legal problems, concocted the allegations to avoid paying leasing costs.

“The guy is broke and can’t pay his bills,” Phillips said of Thanos Papalexis. “He was trying to use this airplane as part of his smoke and mirrors routine to lure investors. … This lawsuit was filed to try to stop me from filing a lawsuit against them. This guy’s background is pretty bad. I’m not the only one going after him.”

The lawsuit, filed March 30 in Collier Circuit Court, alleges fraudulent misrepresentation in the leasing and sale of the plane and seeks damages, including return of the club’s $100,000 deposit; compensation for the cost of flights to and from New York; and reimbursement for the loss of business opportunities, frequent delays due to the plane’s poor condition, and overhead expenses due to delays.

Grand Legacy is a private residence club that requires members to pay a more than $200,000 fee and nearly $1,000 monthly to use a mansion there and another on Legacy Cay, a private island in the Bahamas. Members get full access to a “world-class spa,” pools, beaches and dining.

Its Web site says membership provide owners with the “opportunity to live life on a grand scale, reminiscent of the golden days of opulence.” But records show both its owners —Papalexis and Daniel Gorman — have had past legal problems involving fraud and that seven years ago, Gorman, who was hired to operate a national citrus program, pleaded guilty to defrauding the Florida Citrus Commission out of $85,000.

The lawsuit is the latest problem to hit Jet 1. In March 2006, a federal court judge approved an agreement that put Jet 1 Center in Chapter 7 bankruptcy, prompting a trustee to liquidate its assets. The agreement also called for the Naples Airport Authority to take over Jet 1 Center at the Naples Municipal Airport property, so Phillips moved his operations nearby and set up Jet 1 Charters.

Lawsuit against Jet 1 alleges fraud