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- Spirit Airlines alleged that two employees conspired with a vendor to raise parts prices.
- Some prices were inflated as much as "20 times," their value, the airline wrote in a court filing.
- The filing was made in federal bankruptcy court in Florida, where the vendor filed for Chapter 7.
- See more stories on Insider's business page.
Spirit Airlines alleged in a complaint that two employees had conspired with an airline-parts supplier to defraud the company by jacking up prices for parts by as much as 20 times their value.
The allegations were made in a complaint filed by Spirit in a bankruptcy filing in West Palm Beach, Florida, in which Spirit was listed as a creditor. The bankruptcy was a Chapter 7 filing made by Shahzada Janjua, of Lake Worth, Florida, who ran several companies that supplied airline parts.
Specific details about Janjua's business dealings with the airline Spirit were unclear from the court filings, but, according to the complaint, Janjua had created three companies in Florida – Airtran Industrie, Allstar Aviation, and Aero Parts Company – which had contracts with Spirit.
The airline alleged in its complaint that it overpaid about $857,139 for parts over several years.
Those contracts were awarded by a pair of Spirit employees who met Janjua at a trade show in about 2015, the airline said. The airline named the employees as former materials operations manager Manuel Garay and senior buyer Valeska Reyes in its court filing.
According to the complaint, both Reyes and Garay resigned in October 2017, when Spirit confronted them about their relationship with Janjua, the airline said. Insider sent both Garay and Reyes messages seeking comment.
Spirit alleged that Garay, Reyes, and Janjua "entered into a secret agreement to engage in fraudulent transactions."
It was unclear what the total of those transactions had been, but Spirit in its filing said Janjua "owes a debt" to the airline.
Many of the parts Spirit bought from Janjua's companies weren't necessary, according to the complaint. Some of them had their prices inflated by as much as "twenty times" (the airline underlined that word in its complaint) to "generate ill-gotten gains," Spirit alleged. In some instances, Spirit claims, the two employees involved were paid a kickback.
"In furtherance of the conspiracy, once the aircraft parts sales were completed and the ill-gotten gains realized by the Entities, portions of such funds were paid over or 'kickbacked' to" the two employees involved, the airline said in court filings in Florida.
Insider has reached out to the airline for comment. A lawyer who had represented Janjua in his bankruptcy filing didn't respond to a request for comment.
