updated 12/28/2006 1:08:24 PM ET 2006-12-28T18:08:24

Spain’s High Court has begun a fraud investigation into failed budget airline Air Madrid suspected of selling tickets for flights it knew would never take off, court officials said on Thursday.

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Privately-owned Air Madrid suspended all its flights on Dec. 15, stranding 120,000 people who had used one leg of return tickets, shortly after the government threatened to suspend its licence for repeated delays and safety violations.

Passengers left with worthless tickets, mainly Latin Americans and Romanian migrants planning holidays back home, have since been demanding refunds.

The Spanish government has asked the airline to pay it 6.5 million euros ($8.55 million) it spent rescuing stranded passengers.

No one at Air Madrid was available for comment.

Copyright 2012 Thomson Reuters. Click for restrictions.

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