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Court ruled against Ijaz in fraud case

- February 19, 2012 - Updated 1313 PKT - From Web Edition

Our correspondent

NEW YORK: A New York court ordered Mansoor Ijaz to pay $1.4 million to a European bank after the bank accused the man who initiated memogate of breach of contract, fraud and “unjust enrichment,” according to the court documents.


The revelation raises new questions about the credibility of the American national of Pakistani origin whose claims about a secret memo being sent by civilian Pakistani leaders to US officials are currently being examined by a judicial commission set up by the Supreme Court. Ijaz is to testify before the commission by video link on 22nd February.


Supreme Court of the State of New York judge Charles E Ramos issued the judgment against Mansoor Ijaz on 25th September 2010 after Banca Sammarinese di Investimento (BSI) of San Marino filed a suit for the recovery of a loan obtained by Ijaz. According to documents filed by BSI in court, the bank opened credit lines in favour of Ijaz and his companies, The Ijaz Group Inc. and Aquarius in 2007and 2008 with shares of Mansoor Ijaz’s companies as security. Ijaz stopped paying the interest and failed to return the principal of the loans after October 2008.


BSI’s filing in the court on 6th June 2010 said, “Ijaz owes BSI Euros 661,972.16 plus interest from October 1, 2008. The Ijaz Group Inc. owes BSI $873,692.46 on account No 470 and Euros 1,942.80 on account No 469 plus interest from October 1, 2008. Aquarius owes to BSI Euros 214,068.23 on account No 471 and Euros 130.36 on account No 798 for a total of Euros 214,198.59 plus interest from October 1, 2008.”


Court documents show that Mansoor Ijaz acknowledged that he borrowed from and owed BSI Bank Euros 648,130 plus interest from 8th August 2008. He also acknowledged that the balance due by himself, The Ijaz Group Inc and Aquarius was Euros 1 million 460,000 plus interest from 8th August 2008. According to BSI, Mansoor Ijaz was the “alter ego” of The Ijaz Group and Aquarius as he fully controlled these entities. “Ijaz exercised such dominion and control over the Ijaz Group and Aquarius and the monies plaintiff loaned to those entities in order to commit a fraud against the plaintiff.”


The Banca Sammarinese di Investimento (BSI) of San Marino detailed before the New York court how Mansoor Ijaz’s companies The Ijaz Group and Aquarius were only a cover for him and did not really have any ongoing business that the bank could identify or recover money against. “Defendants Ijaz Group and Aquarius ignored all corporate formalities in the formation and operation of such entities. Ijaz was the only officer and director of the Ijaz Group. Ijaz transferred hundreds of thousands of dollars borrowed by the Ijaz Group from plaintiff (the bank) to himself. Ijaz considered the Ijaz Group’s credit line his personal line of credit,” it said.


BSI’s lawyers Herzfeld and Rubin PC, also alleged that “Ijaz used the lines of credit plaintiff had extended to Ijaz Group and Aquarius for his personal needs, including payment of mortgages and brokerage account fees and used said lines of credit after his personal line of credit had reached its final limit.” Challenging Mansoor Ijaz’s extensive description of his business, BSI’s lawyers told the New York state court that “Ijaz was the only shareholder, officer and director of Aquarius. Aquarius never entered into any contracts nor did it have any employees. Aquarius never filed tax returns.”


The charge that most hurt Mansoor Ijaz’s credibility was that “Ijaz used control and domination over the Ijaz Group and Aquarius to (1) commit fraud and (2) to breach his legal duty and the legal duty of the controlled corporations to repay all monies due to the bank by such corporations.” The bank, located in the tax haven of San Marino in Europe, said that Mansoor Ijaz’s representation to the bank was “false, wilful, fraudulent and intended for BSI to rely on it.”


Judge Charles Ramos ordered in favour of the plaintiffs after the parties “agreed to entry of judgement in favour of plaintiff” and ordered Mansoor Ijaz to pay $1,474,000 to BSI whose address is Via Consiglio Dei Sessanta n99, Dogana, Republic of San Marino. Interestingly, the address of Mansoor Ijaz’s companies is the same as his residential address in the United States, 100 United Nations Plaza, New York. Ijaz’s ex-wife and daughter currently reside at that address.


In the course of negotiating the loans in 2008, Mansoor Ijaz had laid out grand plans for the investments of The Ijaz Group and Aquarius, which by 2010 had proved to be non-starters. In an email to Antonio Perrini, CEO of BSI, dated March 10, 2008, Ijaz claimed, that he was in the process of launching a $50 million project called Aquarius Towers Las Vegas even though just two years later he had not even paid back the $1.4 million he owed to BSI.


In his email, Mansoor Ijaz wrote, “Definitive contracts to fund phase 1 of the project (USD 50 million) were signed in Las Vegas on February 20, 2008. The investor is a large Indian family that has real estate investments around the world, including over 40 apartment units in Las Vegas’ newest condominium towers, Dubai and India. The head of the family is an important political personality from the state where the family resides. My partner is the family representative. The investor’s funds are resident in Switzerland and we are presently going through the necessary due diligence phase with our bank.”


He also claimed that the Indian partner had signed contracts with Ijaz’s Eco-Drive Technologies. “The same investor, due to its close ties with Tata Motors in India, has chosen to invest $10 million in our planned launch of a company to develop the world’s most energy efficient power trains. Definitive contracts for this deal were signed on February 25, 2008 in Orange County, California.”


In the same email Ijaz included a message for the bank’s board of directors, asserting his supposed political clout. “No one could have foreseen the outcome of events that led from the positive outlook on which Perrini made his decisions to lend to us to the negative circumstances we are presently facing,” he wrote. “My representations to Perrini were accurate at the time they were made, but intervening events changed these representations — in some cases dramatically so. Much hard work has gone into correcting the situation, above all to protect my political reputation and future role in American politics.”


According to the attorney for Banca Sammarinese di Investimento (BSI) Peter Kurshan, Mansoor Ijaz has not yet paid the $1.47 million awarded by the court. The bank is now about to start collection enforcement proceedings though Ijaz has no assets in New York except his flat. Several other creditors also have liens against Mansoor Ijaz. Citibank also has a judgment against him for a relatively small amount of $16,021. Aurora Loan Services also filed a motion in New York Supreme court for an unidentified amount in 2007.


In 2002, Ijaz had similar financial difficulties: American Express Travel Services had sued him for $166,880. After New York Supreme Court decided in the favour of the creditor, Ijaz subsequently paid off his debt and a Civil Judgment Release was filed as an acknowledgment by American Express Travel Services that it had been paid. But this lien still shows up in public records. Bank of New York also got a judgement from the New York Supreme Court against Mansoor Ijaz in 2002 to recover $58,698 but no release was filed, implying there may have been no payment.


On 29th April 1997, the Washington Post published an article by David B Ottaway titled ‘Democratic Fund-Raiser Pursues Agenda on Sudan,’ which spoke of Mansoor Ijaz touting his political connections and covert role as intermediary between the US and a foreign government. “Ijaz, who displays photographs in his New York office of himself with Clinton and Gore, acknowledged during six hours of interviews the leverage his fund-raising provided in gaining ‘political prominence’ in Washington for the advancement of his causes,” said the article. It quoted Mansoor Ijaz as saying, “Everybody knows who I am,” adding “Ijaz also acknowledged his commercial interests in effecting reconciliation between the United States and Sudan. As chairman of Crescent Investment Management, a New York firm that he said handles a $2.7 billion investment portfolio — much of it on behalf of Middle East governments — Ijaz said he is particularly interested in new oil field development. Sudan, with moderate reserves estimated at 3.5 billion barrels, is expected to become a petroleum exporter soon and Ijaz said he hopes to manage some of Khartoum’s foreign investment of oil profits.”


Crescent Investment Management does not appear to be active now and despite his much publicised claims about his role in backdoor diplomacy between the US and Sudan, the two countries did not come any closer. Mansoor Ijaz and his company did not emerge as major beneficiaries of Sudan’s oil business and it is not known if Crescent Investment underwent similar issues as Aquarius and The Ijaz Group in relation to their bank borrowings.


Questions about Mansoor Ijaz’s financial dealings in the aftermath of the BSI judgment in New York are part of many issues relating to his credibility that have surfaced since he became the principal figure in the memogate controversy in Pakistan. Last month, it was widely reported that Mansoor Ijaz had acted as commentator in a video titled ‘Junior Jack Stupidisco’ featuring nude women’s wrestling.

Reader Comments
If Mr.Ijaz was such a rotten person then why was Pakistani Ambassador so close to him,It does not make any sense to divert the attention from the real issues facing the Supreme Court.Bringing in an old court judgment is to divert the attention from the real issue at hand.Obviously the people behind this story is thinking very low of Pakistan Supreme Court,the Court will decide Memogate on it's merits and evidence.

naeem khan
Why this sordid affair is being brought up now, looks fishy.The point should be considered whether Zardari and company has asked Americans to intervene on their behalf to weaken Pakistan's security.Granted that Pakistan's Armed Forces operate beyond Pakistan's Constitution and has no respect for the constitution but asking a foreign government to interfere in Pakistan's security is unforgivable.If the evidence shows their involvement then they should be brought to justice.

naeem khan
He may be not credible as a person so his personal testimony can be taken with a pinch of salt, but if the man even convicted is ready to provide hard evidence, then that hard evidence should be acceptable. In so many cases hard evidence have been accepted from criminals

Whatever the above case implies. We must not forget that hard evidence if available even from convicted person is still a hard evidence. However, a personal account can be disregarded if the person is not considered credible.

This case is in appeal and the final judgement will be by the High Court. This type of tug-o-war is normal in American business. There are so many projects which hv gone sour and investments gone into abyss. There is no need to relate this case to Memogate. Zardari had no source of earning and how he accumulated that much wealth see Article in Jang dated 17th February 2012 by Munir Baloch.

Wake up Pakistanis who jump their guns on Zardari. Your hero Mansoor Ijaz has a feather in his cap. Please applaud. Imran Khan and Nawaz Sharif, please send kudos to your mentor.

Irfan Brohi
Now where r those stupid guys who post their comments on every thing related to Zardari. These stupid now sleeping.

jan muhammad
Raises the question why has the New York Court ruling surfaced now several years later than the event it relates to? Is it anyway related to the ongoing investigation against those involved in memogate probe? Who is the funder and (possible) beneficiary of "unearthing" the New York Court ruling at this time?.Some people bending over backward to cloud the main issue and divert attention to peripheral issues.

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