MANHATTAN (CN) – Two lawyered-up Iranian expatriates threatened to “burn down” a construction project in Las Vegas, with “extortionist demands,” “scorched-earth” tactics and death threats, the project’s backers claim in court.
Alliance Network and two subsidiaries sued lead defendant Sidley Austin LLP, two of its Los Angeles attorneys, the Iranian expatriate owners of defendants Mousa Alliance and Nigel Alliance, and other attorneys, in an 89-page complaint in New York County Supreme Court.
Alliance claims it indirectly invested in the World Market Center project, a $1 billion home furnishing showrooms complex in Las Vegas. It claims the project relied on funding from the owners of Mousa Alliance and Nigel Alliance, who promised investments they never intended to provide.
Defendants include Sidley Austin attorneys Howard Rubinroit and Ronald Cohen, Berger & Webb LLP, Steven Berger, Jonathan Rogin, The Law Offices of Ronald Slates PC, Ronald Slates and J. Steven Bingman.
The lurid complaint, which seeks more than $100 million in damages, drips indignation at the legal tactics it imputes to the defendants.
“The temptation to play on, and sometimes over, the legal and ethical ‘edge’ is not a new phenomenon,” the complaint states. “But members of the bar, even when purporting to zealously represent overly aggressive clients, have a responsibility, codified in higher moral norms and explicit judicial laws and rules, to not violate the law in the name of ‘hardball’ legal tactics.”
It continues, a few sentences later, “When both clients and lawyers collude and conspire to ignore these legal and ethical borders for their mutual enrichment, the integrity of the judicial system is implicated and the rule of law is threatened, requiring the courts to intervene.”
According to the complaint, Nigel Alliance and Mousa Alliance’s alter ego, (nonparty) NAMA Holdings, was not only an acronym of their names, but also a pun for “façade” in Farsi, their native language.
“NAMA is and has at all times been a façade and alter ego for Nigel and Mousa,” the complaint states.
Nigel and Mousa used NAMA to execute a judgment that a California court entered, even though they had been prohibited from doing so until the Appellate Division took up the case, according to the complaint.
“This, however, was not an isolated instance of such fraud and deceit,” the complaint states. “Rather, as complained herein, the defendants, including the attorney defendants, have engaged in continuing chronic and delinquent pattern of deceit and collusion and fraudulent conduct over a six year period during the ongoing litigation.”
Alliance claims that Mousa, Nigel and the defendant attorneys also lied about “tens of millions of dollars” promised for a phase of the World Market Center project.
“An arbitration panel has already ruled that the Alliance Companies and others foreseeably relied on such fraudulent misrepresentations and concealments, to their severe detriment,” the complaint states.
“At several critical junctures, Mousa and Nigel, with the assistance and collusion of the Sidley defendants and/or other attorney defendants, made clear their wrongful intent to put the entire WMC project at risk in order to compel others to provide them with various economic benefits to which they were not entitled. In fact, Mousa and Nigel on various occasions threatened to destroy the WMC project unless their extortionist demands were satisfied, and Mousa even said: ‘I will burn down the project.’
“Further, at a mediation meeting called by Mousa and Nigel in New York on November 17, 2006, in a conference room at the Michelangelo Hotel in New York, Nigel, flanked by Mousa, repeatedly made death threats to one of the managers of Alliance Network, Shawn Samson (‘Samson’), in the presence of the other manager of Alliance Network, Jack Kashani (‘Kashani’),” the complaint states.
Alliance claims that Nigel and Mousa were trying to intimidate them to release them from the multimillion-dollar investment, one week before it was due.
Three days after this meeting, Mousa and Nigel’s lawyer Koorosh (nonparty) Banayan told Alliance’s office manager to expect “mortal combat,” as he delivered these checks, according to the complaint.
“The arbitration panel ruled that these purported checks constituted improper tender and were impermissibly conditional,” the complaint states. “Consequently, the arbitration panel ruled alter ego NAMA, and alter ego conduit Mousa and Nigel, was in material default of its obligation and commitment to fund tens of millions of dollars.”
The expats ultimately invested 1 percent of the total $1.1 billion that other investors contributed to the project, and they made back that amount from distributions made by Alliance, the complaint states.
Alliance seeks more than $100 million in treble damages for 16 counts, including fraud, breach of contract, breach of fiduciary duty and a violation of a subsection of New York Judiciary Law that allegedly carries a risk of disbarment.
It is represented by New York-based attorneys Jerome Tarnoff of Morrison Cohen and the law firm of Andrew Bluestone.
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