General Mills Entity's Subpoena Upheld
(CN) - A federal judge upheld the subpoena of an email server issued after the alleged theft of about 90 percent of capital for a French food processer partly owned by General Mills.
Societe d'Etude de Realisation et d'Exploitation Pour le Traitement du Mais, abbreviated as Seretram, applied on Nov. 20 to file a subpoena on 1&1 Mail & Media fka GMX Internet Services, the Chesterbrook, Pa.-based subsidiary of a German webhosting firm.
The application states that Seretram had about $25.8 million in capital until someone posing as its financial director, Andre Yvin, sent a fraudulent email to the company's accountant, Annie Larrouture.
The phony email allegedly said that a takeover bid was in store, but "highly confidential," and told Larrouture to contact only "our legal firm" at a GMX-hosted account about the matter.
In emails that followed, the fraudster directed Larrouture to transfer, in four installments, about $23 million of Seretram funds to a bank account, according to the subpoena application.
The food maker says it discovered its overdrawn account when an employee tried to shift funds from another company account for a different purpose, leading to an investigation by the London police.
Seretram says it ultimately obtained an order from the London High Court on Nov. 7, compelling production of the relevant bank records, and an order from the High Court of Hong Kong, freezing bank accounts that had received funds from the fraudulent transfers.
The company, applying ex parte to the U.S. District Court for the Eastern District of Pennsylvania, seeks discovery in the United States for criminal proceedings that allegedly have begun in France and are expected to start soon in the U.K.
Seretram wants information about the identity of the GMX account owner, including his location and any other data that might help in punishing those behind the fraud.
U.S. District Judge Gene Pratter granted the application Nov. 21, finding that Seretram is an "interested person" and met all other mandatory requirements under U.S. Code Section 1782.
Noting that GMX resides within the Eastern District of Pennsylvania, Pratter also found that, "in seeking information about one of GMX's users, Seretram has requested discovery that clearly falls under the 'testimony or statement' or 'document or other thing' requirement.
"Third, each of the criminal proceeding in France and the expected criminal proceeding in the U.K., provides an independently adequate instantiation of 'a proceeding in a foreign tribunal, including criminal investigations conducted before formal accusation,'" the judge said.
The fact that Seretram is a nonparty to the foreign actions also weighs in its favor, the ruling states, based on the 2004 ruling, Intel Corp. v. Advanced Micro Devices.
"Seretram requests information so that it can both assist in the criminal investigation as well as pursue relief in parallel on its own," Pratter wrote. "As the victim of fraud, it should be able to do so.
"Second, the court is unaware of any policy observed by the French and English courts that would limit 'the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance'; nor does the court believe that Seretram is attempting to 'circumvent foreign proof-gathering restrictions or other policies,'" the judge added. "To the contrary, the London High Court has already ordered discovery relating to the bank account in question; although that account is held in the U.K. rather than here in the U.S., such discovery weighs in Seretram's favor."
Seretram's request is not "unduly intrusive or burdensome," Pratter ruled.
Headquartered in Minneapolis, General Mills reportedly netted about $17.8 billion in sales in 2012-13, while GMX's German parent, United Internet AG, reported more than $15 billion in sales in the last nine months.