SEATTLE (CN) – A Chinese company complains of brazenly dirty doings in the seafood business, including forgery of bank and government letters, “coercion and subterfuge,” and a coverup carried out with compromising photos.
Gwai Yeung Marine Product Co., of Hong Kong, sued Cloudstone International Trading Corp., its alter ego Ocean Mind Corp., another LLC and three people, in King County Court.
Gwai claims the defendants, its U.S. geoduck suppliers, scammed money using “coercion and subterfuge,” forged letters from Bank of America and the Washington Department of Natural Resources, and coerced a company rep to sign off on the con by obtaining compromising photos of him.
The geoduck (pronounced gooey duck) is a giant clam found in the Pacific Northwest. It is one of the longest-living animals on Earth, sometimes surviving for 150 years or more.
Gwai says it agreed to buy wild geoduck from Cloudstone (CITC) for distribution in Hong Kong, and advanced money for the harvesting operations in exchange for a reduced price.
But before the harvest started, Gwai learned that Cloudstone was “chronically behind” on payments to divers and other contractors and couldn’t afford to pay lease fees to the state Department of Natural Resources, according to the complaint.
Cloudstone, reorganized as Ocean Mind, said it was short of money because Bank of America had frozen its checking account, and asked for financial help from Gwai, according to the complaint.
“As evidence of Bank of America’s action, CITC/OMC provided a document on what appeared to be Bank of America stationery which purported to freeze the account,” the complaint states.
Gwai says it advanced the defendants $106,000, to be repaid in additional geoduck discounts.
“Gwai through its agent, subsequently learned within the last two weeks that Bank of America letter is a forgery, and the accounts in fact had never been frozen by Bank of America,” according to the complaint.
After this, Gwai says, Cloudstone “regularly” started asking for more money.
“Generally, they were funneled through Gwai agent’s son Jim, and generally Gwai refused, but eventually relented when its agent was informed that the product source would be cut off unless the additional funds were forwarded, having its product source cut off could prove a severe financial detriment to Gwai as it would not be able to fulfill its obligations to its customers, and likely face damage to its reputation and breaches of contract for failure to provide promised product,” the complaint states.
Then, Gwai says, Cloudstone said it needed more money to cure defaults with the Department of Natural Resources, and that its geoduck harvest had been reduced by the state.
“This alleged reduction was significant because it amounted to 3,000 pounds of geoduck that are worth approximately $80,000.00 in the market, and Gwai had intended to sell the geoduck in Hong Kong to defray the unanticipated monies that it had forwarded previously ClTC/OMC, according to the complaint.
Gwai says Cloudstone provided another forged letter, this time purporting to be from the Washington Department of Natural Resources.
“As with the Bank of America issue, Gwai’s agent questioned whether DNR in fact had reduced the anticipated quota, as proof she was forwarded a letter (Mike Chevalier of DNR has confirmed that this letter is forgery) on DNR stationary which purports to reduce the quota by CITC/OMC.
“DNR had in fact not issued such a letter, Gwai has since learned that ClTC/OMC sold the additional geoducks to a third party contrary to the agreement between it and Gwai,” the complaint states. (Parentheses in complaint.)
Gwai says its representative Rebecca Leung flew to Seattle to consult with her son, Jim, who had been overseeing the operations. Gwai says Jim admitted to Leung that he knew the letters were forgeries, but that he went along with the scheme because of the “compromising pictures.”
“Thereafter it was revealed to Ms. Leung that CITC/OMC’s principals had coerced Jim into assisting in their fraudulent activities by threatening to reveal to compromising pictures of he and his girlfriend that could prove damaging since Jim had a wife in Hong Kong,” the complaint states. (Grammar as in complaint.)
Cloudstone had still not settled the past due account with the DNR, so Leung tried in vain to save the harvest by directly depositing $510,000 with the agency, Gwai says.
“Thereafter, it has now been learned, a day before the harvesting season was to begin, defendants met with either Mr. Chevalier or another official at DNR, and demanded cancellation of the lease and return of the deposit made by Gwai, all without informing Gwai or its agent that they sought the same,” the complaint states.
Gwai says Cloudstone “had no intent on fulfilling its part of the bargain.”
It seeks damages for breach of contract, unjust enrichment, negligent misrepresentation, fraud and violation of the Consumer Protection Act.
Also named as defendants are Cloudstone representatives Sang Ik Chung, Duke Anh, Tae Ho Yoon and TG CNI Inc.
Gwai is represented by James Vasquez with In Pacta, of Seattle.