The cash poured into failed Australian airline Bonza is being examined as part of a US investigation into money laundering.

The US Department of Justice is investigating whether private investment firm 777 Partners and its primary source of funding, insurer A-CAP, have violated US money-laundering laws.

Investigators are examining whether policyholders' money was invested where it was supposed to be, including why some funds meant for 777's football teams instead went to Bonza.

Southern District of New York assistant attorney Nicolas Roos, who helped prosecute crypto fraudster Sam Bankman-Fried, is part of the team conducting the probe. His office did not respond to request for comment.

Bonza, which had been "wholly reliant" on funding from 777, went into voluntary administration in April and liquidation in July.

'It was economic suicide'

The Bonza model — flying jets between regional destinations on ultra-low-cost fares — was met with scepticism from many in the aviation industry.

Its collapse came barely a year after take-off.

Virgin co-founder Brett Godfrey is among those who thought it was a doomed idea from the start.

"If Qantas or Virgin thought it was a great idea to fly 180-seat aeroplanes between Maroochydore and Cairns, well, they probably would've done it. There just wasn't the market there," he said.

"It was economic suicide from the outset."

But former Bonza pilot Paul McKeown saw the airline's early success and told Four Corners the model was not the problem.

"The start-up of Bonza went tremendously well," he said.

"We really generated an airline from nothing, and we had a great wave of public support and our loads were really good, which flew in the face of some of the negative commentary we got before we started."

Buoyed by its positive reception, Bonza announced plans to launch a new base on the Gold Coast at the end of 2023. Mr McKeown says staff started to worry — the airline barely had enough aircraft for its existing network.

The solution was to source planes and crew from Canadian airline Flair, which also received funding from 777. The arrangement — known as a wet lease — required approval from Australian and Canadian regulators.

According to Mr McKeown, experienced pilots tried to warn Bonza management the process was likely to take longer than anticipated.

"Of course, what did happen is we started selling seats on tickets that we were never, ever gonna be able to supply," he said.

Approvals came more than a month later than hoped. The delay was catastrophic: 15,000 passengers' flights were cancelled near Christmas.

In an internal email, obtained by Four Corners, Bonza chief executive Tim Jordan appeared to place blame for the situation with the regulators.

"Bonza has certainly damaged ourselves considerably as a consequence of this overly lengthy approvals process and there will certainly be lessons to be learned," he wrote.

"We will certainly learn them. The arrangement was last week called 'unique' and 'scores an A+ for creativity' by the Canadian regulator, which, as we have unfortunately discovered, isn't necessarily a positive the first time around."

Mr Jordan did not respond to specific questions from Four Corners.

Mr McKeown said it was not clear why management pushed ahead with the plan despite staff warnings.

"In terms of what was pushing management to make these decisions and the crazy overreach, none of us have any idea, and we don't know what pressures were being forced on management by our funders," he said.

'Vast scheme of corporate manipulation'

Bonza's investor 777 Partners is not just under investigation for money laundering, it is also facing multiple lawsuits, including one alleging more than $500 million in fraud.

Former employee Timothy O'Neil-Dunne is among those pursuing the firm in court.

His lawyer, in a letter sent to the judge overseeing his civil case, accused 777 and its founders of "a vast scheme of corporate manipulation and theft of assets on a Bernie Madoff scale".

Mr O'Neil-Dunne worked in 777's aviation arm, but he has alleged he was kept in the dark on matters including the investment in Bonza.

"I believe that there was behaviour by 777 Partners which resulted in the airline going bankrupt, and whether or not that was a good decision or a bad decision, that decision was never available to me as a board director … so I had no control over that," he told Four Corners.

In a report to creditors, liquidation firm Hall Chadwick has written that Bonza did not appear to have any documented agreements with 777 relating to its loan funding, which was "sporadic and delayed". It said managers had received "verbal assurances payment would be forthcoming".

Four Corners has been told there were no formal agreements in place specifying how many aircraft the airline would receive — despite its success relying on a growing fleet.

777, its founders and A-CAP did not respond to Four Corners's requests for comment.

Journalist Paul Brown, who has investigated 777 for outlet Josimar, said he believed Bonza's Australian directors had questions to answer about their decision to rely on the Miami-based firm.

"777 never even provided a letter of comfort to confirm that they would continue to fund the airline if it ran into difficulty," Mr Brown said.

"Any responsible director obviously has duties … they have a duty of care both to the business and to its customers to make sure that the money you are accepting comes from a reputable source."

In response to questions from Four Corners, founder Tim Jordan referred to a statement published by Hall Chadwick in its report to creditors in June.

"Bonza was wholly reliant on funding from our sole investor 777 Partners," the statement said.

"Although there was no feedback that funding had ceased, our ongoing and progressing execution plans were curtailed abruptly on the 30th April 2024 with the repossession of our aircraft."

The repossession was not without warning.

In March, a staff member for aircraft lessor AIP accidentally sent Bonza's chief financial officer a screenshot of an email that said: "We are moving full speed ahead to get the planes out of there ASAP and wind this up."

Mr Jordan's statement said Bonza was on the cusp of becoming "cash positive".

"Unfortunately for our Bonza team, our customers, our partners and the communities we serviced across Australia, that didn't get an opportunity to come to fruition owing to the undercapitalisation of the business and the consequential repossession of our aircraft."

ASIC is examining whether Bonza was trading while insolvent.

For staff like pilot Paul McKeown, the collapse of the airline was like a "Shakespearean tragedy".

"If another airline was going to try the same model — and I hope they do because the Bonza model was a winner — I just hope that they've got good backing, good solid backing, preferably from an Australian institutional investor, but also that they listen to the voice of experience in the company," he said.

Watch Four Corners' full investigation into Australia's aviation industry, Flight Club, on ABC iview.