Jet Genius, Charter Flight Group FlyCFG partner refiles lawsuit against Jordan Brown. The initial lawsuit against Brown, Jet Genius, Jet Agency Global was dismissed in June with the opportunity to refile, which was extended.
After getting an extension and with new legal counsel, Jet Genius Holdings, Inc. partner Aaron “Angel” Stanz refiled an amended complaint against partner Jordan Brown and Charter Fly Group FlyCFG, Jet Agency, JetCharter.com, and related companies after his initial complaint was dismissed in June.
The filing in the United States District Court for the Southern District of California names Jordan Brown; Jet Genius Holdings, Inc.; Jet Genius Florida Holdings, Inc.; C3Jets LLC; Bowman Aviation, Inc.; Jet Agency Global, LLC; C3 Limo LLC; Jetcharter.com LLC; and DOES 1-20, and Jet Genius Holdings, Inc.
If you are following, you may remember Stanz served as Chief Technology Officer and has had multiple run-ins with law enforcement.
The revised lawsuit alleges, “While JGH should be a thriving business, Brown’s use of the business as his personal piggy bank threatens its collapse. Brown has raided JGH’s assets through phony transactions, indefensible self-approved compensation, and wrongful diversion of corporate assets. Brown finances an extravagant lifestyle of exotic vacations, luxury vehicles, and glamorous fashion by siphoning JGH’s revenues. The total amount that Brown has wrongfully extracted from JGH likely exceeds millions of dollars. Brown simply uses JGH funds to maintain his lifestyle.”
It claims Brown used funds “to subsidize his opulent lifestyle, including regularly taking vacations to the Caribbean, Monaco, Africa, Maldives, and St. Barts, attending Formula 1 races, indulging in the highest fashion, adorning himself with Louis Vuitton, Hermes, and high-end watches, and maintaining homes in locations like Palm Beach, Florida, Aspen, Colorado, and Del Mar, California.”
It continues, “In contrast, Plaintiff has received virtually no shareholder benefits, profits, distributions or dividends.”
Stanz further alleges, “Brown also employs a shell game of entities to avoid paying Plaintiff amounts due to him and to avoid other company obligations. In so doing, Brown disregards nearly all corporate formalities and just shifts assets from one entity to another, all for his personal gain and benefit. Brown uses his shell game to evade liability arising from JGH’s business operations. In particular, he seeks to avoid millions in assessed federal excise taxes (“FET”) related to chartering aircrafts. Brown has failed to timely and fully pay the FET related to JGH’s operations. Instead, he took actions to saddle Plaintiff personally with much of that burden—$1.3 million in unpaid FET—, despite assurances Brown would account for those taxes, while also shifting JGH’s operations and assets to a new entity to avoid payments. Plaintiff believes Brown’s plan is to continue repeating that cycle all for his personal gain. To date, JGH has refused to defend or indemnify Plaintiff for the FET liability, Brown has refused to acknowledge JGH’s obligations to Plaintiff, and Brown has even attempted to use the enormous tax burden as leverage to obtain concessions from Plaintiff.”
In this new complaint, it is claimed, “Brown escalated his pattern of outrageous conduct even after Plaintiff filed this lawsuit. On information and belief, in or around December 2022, Brown convinced the carrier of Plaintiff’s cell phone to transfer Plaintiff’s phone number to Brown, asserting that the account belonged to the company account. Brown then used his access to Plaintiff’s cell phone number to call Plaintiff’s then-attorney, feigning to be Plaintiff himself, and sought to engage in conversations regarding matters within the ambit of the attorney-client privileged.”
A key element of the lawsuit remains unpaid Federal Excise tax, which is charged at 7.5% for private jet charters, either on-demand or via jet cards.
The lawsuit alleges that unpaid Federal Excise Tax “ballooned to more than $5 million.”
It notes, “On December 2, 2019, (Stanz) attended a call with Brown and (former partner) Wolf, amongst several others. On the call, staff confirmed that JGH’s outstanding FET liability was approximately $2.5 million. Brown stated that he had established a fund to pay the FET, but it only had $50,000 in it. Brown did not and would not explain where the rest of the money went.”
However, “In June of 2021, the IRS escalated pressure against JGH for its unpaid FET. IRS agents contacted the original JGH shareholders, Brown, Plaintiff, and Wolf, and stated that JGH had an outstanding FET liability of over $5 million. Plaintiff worried that the IRS would attempt to collect this amount from the shareholders personally.
Stanz says he “was personally assessed a trust fund recovery penalty of $1.3 million” from the IRS.
The lawsuit also asserts, “Brown has made $1.9 million in distributions of JGH funds to himself while only distributing $23,000 to the other JGH shareholders in wild disproportion to shares held by the shareholders of JGH.”
Stanz continues to be a shareholder in Jet Genius Holdings, according to the filing.
For his part, Stanz has had his own legal issues in the past.
In May 2018, Stanz was charged by the SEC with defrauding investors by making exaggerated and misleading claims about the medical marijuana company’s business operations and financial condition.
The case was settled without Stanz admitting or denying the SEC’s allegations.
In 2009, Stanz was cited by the Attorney General of Illinois for “alleged phone cramming operations..that placed unauthorized charges on the phone bills of thousands of Illinois consumers, small businesses and local governments.”
As part of the settlement, Stanz agreed to cease participating in the alleged deceptive practices.
Brown and his attorney did not respond to a request for comment.
Jet Genius Jordan Brown Charter Flight Group Fraud Complaint Aug.22.2023
