The recent bankruptcy filing for Jet Network has an important lesson for folks putting down deposits on charter cards and fractional cards - do your due diligence.
This story is a little confusing because there are two Jet Networks. One is in chapter 7 bankruptcy and the other new one, with overlapping management and staff from the first, is using the same website and logo as the first.
In the case of the bankrupt JetNetwork, some customers found out too late that their six figure card deposits weren't held in escrow. And in fact the IRS had taken the money to pay off back taxes that the bankrupt company owed. These same customers are now going through the courts to try and recover their funds.
So while charter cards and fractional jet cards can offer some great benefits for flying privately, you need to do your due diligence before paying your deposit. Either make sure the money is truly put into escrow, and that there are proper procedures in place for drawing it down as you fly. Or make sure the company you are working with is very sound financially.
In 2009, Paul Svensen was accused of using assets from Jet Network to start Jet Network FC Holdings (JNFC). Svensen was also the CEO of JetCard Plus.
As with many bankruptcy cases, this one dragged on and was still going in 2012. Stuart Cauff was one of the founders and was, at one point, Jet Network's Chief Executive Officer and was still tied into the 2012 court cases.
The bankruptcy was finally closed in 2017.
But, the saga continued, when in 2019 Treasury Secretary Steven Mnuchin won a lawsuit for over $200,000 against JetCard Plus. Which still had Paul Svensen as CEO.