In his continuing efforts to deny allegations he was involved in a USD30 million fraud, Randy Butler, former chief executive of Sky Bahamas (SBM, Nassau Int'l), has rejected claims that he “swindled” the carrier out of millions of dollars, the Bahamian archipelago’s Eyewitness News reported on January 25.

In an ongoing court battle, Butler was reacting to Fred Kaiser's claims, a Canadian businessman. The latter financed the carrier via two companies he controlled, Cayman-registered Advanced Aviation and Bahamian-registered Alpha Aviation.

Kaiser claimed that Butler had “bilked” insurers and made money on the side by selling engines off-market, according to court papers seen by the online news site.

According to the documents, the legal clash between the former partners began over a year ago. As previously reported, Kaiser alleged in a statement of claim in November 2020 that Butler and a former deputy prime minister, Peter Turnquest, had been involved in a USD30 million fraud against the two companies, mostly involving fake loans and fraudulent invoices. Both vehemently denied the accusations.

In the most recent court papers, Kaiser accused Butler of claiming insurance for aircraft damage without registering the sums in Advanced Aviation’s accounts.

When the Bahamas Civil Aviation Authority (BCAA) suspended Sky Bahamas’ Air Operator’s Certificate (AOC) in July 2019, the airline operated scheduled passenger flights from Nassau Int'l to Cat Island, Marsh Harbour, and Moss Town using an all-Saab fleet of two Saab 340As and one Saab 340B.

In the court filings, Butler acknowledged that Alpha Aviation had financed the aircraft leased to Sky Bahamas and that several engines attached to these aircraft as well as other parts and tools stored in a maintenance hangar at Nassau Int'l were the property of Sky Bahamas.

But Kaiser accused Butler of improperly dealing in and selling the turboprops’ engine components, “cannibalising” the aircraft by routinely stealing the engines.

Butler rejected Kaiser’s claims that the airline was “defunct and inoperative” and argued that he could only have acted on the instructions of Kaiser and Turnquest as every decision had to be reported to them.

Yet Kaiser said he only discovered the actions when he was contacted in 2019 by several Florida-based lessors seeking to repossess their engines due to late lease payments. According to the court papers, 16 engines belonging to eight Saab aircraft, valued at USD500,000 each, cannot be accounted for.