The Free Press, Mankato, MN

Local News

April 27, 2013

Lawsuit accuses North Star Aviation of fraud

Twin Cities business owner claims he was overcharged thousands of dollars for fuel, maintenance

MANKATO — A Twin Cities business owner who was maintaining corporate planes in Mankato is suing North Star Aviation for allegedly overcharging for maintenance, fuel, labor and parts.

Information from former North Star Aviation employees that Burwell Enterprises received in the fall of 2012 led to the lawsuit. It claims North Star’s owners fraudulently increased the charges North Star paid to other businesses while servicing Burwell’s planes.

Burwell Enterprises manages the corporate plane operations for Twin Cities multi-millionaire Rodney Burwell’s businesses, which include 19 John Deere implement dealerships in five states, the Silvertree Hotel in Snowmass, Colo., and the Madison Concourse Hotel and Governor’s Club in Madison, Wis. Burwell started doing business with North Star in 2004 with one corporate jet that also was leased to other users.

The contract between Burwell and North Star changed twice in 2008. The first contract said Burwell would be billed $75 per hour for labor and parts would be billed at 15 percent over North Star’s cost, according to the civil complaint filed by Burwell. In September 2008, the contract was changed to say North Star would be paid a fixed management fee. Labor, fuel and parts would be billed at North Star’s actual costs.

A second aircraft, not a jet, was added later. The latest contract paid North Star $80,000 per year to service the jet and $40,000 per year to service the plane with two propeller engines.

After receiving the tips from former North Star employees in October, Burwell Enterprises checked for irregularities in invoices it had received from North Star. Burwell allegedly found several incidents where invoices from third-party contractors, such as parts suppliers, had been altered. They also reported finding fuel receipts showing they had been overcharged for fuel.

The contracts were terminated and Burwell asked North Star to provide original vendor invoices so billing statements in 2011 and 2012 could be audited. North Star wouldn’t provide the information, according to the complaint. Burwell responded by providing Mark Smith, North Star president and chief executive officer, examples of invoices that had been altered.

Text Only | Photo Reprints
Local News