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Sunday, July 31, 2005

Deal for Bahrain Airline Goes Bad

In an unusual lawsuit, a Mecklenburg woman is ordered to pay a Lebanese businessman $626,000 for committing fraud in their deal to buy two airplanes and a flight simulator to start a new Middle Eastern airline. Refaat Abul Hosn, who lives in Detroit (US), says he wants to open an airline in Bahrain to fly passengers on humanitarian and religious pilgrimages.

He had an agreement to buy two Boeing 747s, spare parts and a simulator from Kuwait Airways, court records show. But the deal stalled last December when a Mecklenburg woman failed to deliver $10 million in financing as she promised. Hosn sued Theresa Lewis for fraud in Mecklenburg civil court, seeking $10 million in damages. Mecklenburg Superior Court Judge Richard Boner on Thursday ordered Lewis to pay $626,000 in damages and documented expenses by Hosn.

(Mecklenburg Superior Court where Lewis on July 22nd was ordered to pay up)

Lewis, 32, who also goes by Theresa Finocchio, is awaiting sentencing on federal charges related to a mortgage fraud scheme in the Charlotte area. She didn't answer Hosn's civil lawsuit, but she told the Observer she pulled out of the airline deal because she began to question Hosn's plans.

"I had growing concerns ... (The) business plan didn't make a lot of sense," Lewis said in an interview. "I worried that a man of Arab descent would have ownership of 747s and a simulator, and would be operating a simulator in an Arabic country with no one watching."

Hosn dismissed Lewis' speculation, saying his plans were legitimate business. Hosn, who says he is a former pilot, was pleased with the verdict but disappointed in the damage award, saying he owes hundreds of thousands to Middle East businesses that helped organize and promote his airline plans for Bahrain. Federal authorities declined to say whether they have any interest in the case.

(A Kuwait Airways Boeing 777/747 refuels on the tarmac in Frankfurt)

Unaware of fraud charges pending against her, Hosn signed a joint venture with Lewis in October 2004, court records show. Under the agreement, Lewis pledged to arrange $10 million in financing for Hosn's plans: $4.5 million for planes, parts and the simulator; $4.9 million for airline operations; and $500,000 to erect 10 manufactured homes in Iraq. Lewis told Hosn she'd obtained necessary financing and presented documentation.

He entered an agreement to buy the planes, he said in court, and spent thousands to recruit pilots and employees for his airline, travelling to Kuwait, London, Paris, Saudi Arabia, United Arab Emirates and Bahrain. Hosn also wired $125,000 to Lewis' bank account to cover his share of fees Lewis claimed was required for the financing. Because Lewis didn't file an official answer to Hosn's lawsuit, an entry of default was ordered against Lewis.

Source: The Charlotte Observer | reBlogged By: News Blog re-Blog
Filed Under: US, Airline, Boeing 747, Fraud, Bahrain, Middle East | Permalink

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