"The problem with the job description - known to Radujko but concealed from Friedman - was that Palladyne had no 'Investment Management Department,' and that the so-called Deputy Chief Investment Officer was a phantom position. The 'deputy' had no 'chief' to whom he or she could report," the complaint states.
Friedman claims he gave up other job offers to work for the defendants, after they flew him to Amsterdam for 18 hours of interviews and meetings. He claims did his due diligence, sending them "an array of questions and metrics material to determining Palladyne's substance and quality."
However, he says in the complaint: "Unbeknownst to Friedman, Palladyne's replies were bogus. The responses falsely portrayed a company similar to that described on the fictional website, falsely represented an array of 'investment results' in various asset classes that was a fictional fabrication, misrepresented the nature and breadth of their client base (omitting any reference to the predominant base of funds out of Libya and linked to Ghaddafi) and made false representations about a large clientele of so-called Middle Eastern sovereign funds that was nonexistent."
So, Friedman says, he abandoned his search for honest work in the United States and agreed to move to Amsterdam.
The complaint continues: "Several months of back-and-forth ensued over details of the contract, focused primarily on Palladyne's repeated and emphatic concern over protecting the secrecy of its internal affairs and restricting Friedman from contacting any of Palladyne's clients, or even its non-client 'business contacts.'
"During all of those discussions, defendants Yeo and Alonso repeatedly emphasized that the preponderance of their client base was 'Middle Eastern sovereign funds.'
"It was, defendant Yeo said, for those reasons that Palladyne was particularly sensitive to not only protect the identities and relationships with clients, but also its relationships with so-called 'partners' that were, in effect, no more than the business equivalent of acquaintances.
"No mention was made of Libya, the Ghaddafi connection or of Palladyne's heavy dependence on its illicit activities relating to Libya.
"After much back and forth focused on confidentiality and non-compete clauses, job title and other smaller details, an agreement was reached and Friedman arrived in Amsterdam on November 26, 2011."
There, Friedman says, he "discovered a stunning, disturbing array of facts about Palladyne."
"The thrust of the revelations - discreetly volunteered by Palladyne employees (including multiple disgruntled executives who were planning to leave the company - including defendant Tischenko and another Palladyne executive (Pablo Perez-Fernandez) -- was that Palladyne was the asset management company equivalent of a Potemkin Village, fronting for a kickback and money laundering scheme relating to funds out of Libya - not the Middle East.
"Simply stated, Palladyne was a fraud.
"It was nothing more than a façade created to conceal criminal transactions funded by Libyan patrimony and funds funneled to Palladyne at the behest of defendant
Abudher's father-in-law, Shukri Ghanem who, as head of the Libyan National Oil
Company, had total control over the source of all of Libya's investment funds.
"Palladyne's primary function had nothing to do with the fictional company portrayed to the public (and to Friedman) through its website.
"Palladyne's real purposes were to (a) launder money defalcated from Libyan government oil revenues by the family and friends of Muammar Ghaddafi, the dictator who was eventually deposed and killed in 2011; (b) to serve as a recipient and guardian of bribes and kickbacks from companies doing business with the Ghaddafi regime (or hoping to do business with them) or the state oil company run by Abudher's father-in-law; and (c) to launder and protect money belonging to the family and friends of Palladyne's CEO, defendant Abudher."
Friedman says he found that the company did not have, as it had claimed, $1 billion under management and another $8 billion in "advisory assets"; "in fact it had $700,000,000 under management (to the extent that anything was being managed at all), none of which emanated from arms-length 'institutional investors and
pension funds' vaunted in its website, and all of which came from the Libyan Investment Authority [LIA], the Libyan African Portfolio and the Libyan Foreign Bank - each under the influence of Abudher's father-in-law. Ghaddafi's previous Prime
Minister and the then-head of the Libyan National Oil Company (the source of literally all of the LIA's $55,000,000,000 in funds to invest)." (Parentheses, but not brackets, in complaint."
In reality, Friedman says, his job did not exist, as the defendants' money was frozen due to the Libyan civil war.
The complaints states: "Because nearly all of Palladyne's funds came from the Ghaddafi regime, when Friedman arrived in Amsterdam the preponderance of Palladyne's accounts weren't being traded at all - they had been frozen by the order of the United States government and the European Union (and Palladyne's securities custodian, State Street Bank), which were engaged in a de facto war with the Ghaddafi regime (which was itself engaged in a civil war);
"Friedman discovered that State Street Bank (Boston), the world's leading securities custodian, had frozen Palladyne's accounts, and that Abudher was frantically trying to compel State Street via legal actions to unfreeze Palladyne's assets for the apparent purpose of evading the sanctions;
"As a result, there were no funds to invest and no 'risk' to 'manage.' In short, the 'job' described to Friedman by Radujko did not exist. ...
"As the alarming facts about Palladyne trickled in, Friedman became concerned that he had moved to Europe for a job that did not exist, with a corrupt organization that (a) could not get new business in an honest fashion, (b) whose assets were not being traded, and (c) much of whose client base had either been killed in the Libyan revolution, were in jail, were in exile or were under investigation for corruption."
Friedman also found himself governed by Dutch law. He describes how he tried to extricate himself from the situation, and tried to persuade the defendants to straighten up. He says he was unable to do that: "SThree and Radujko continued, and continue to the date of this complaint, to solicit applicants in Connecticut and other states for positions with Palladyne with full knowledge that their future careers may be destroyed by working for a fraudulent organization. Elden, SThree Group and Radujko are thereby actively and knowingly conspiring with Palladyne."
He seeks declaratory judgment and punitive damages for fraud, fraudulent inducement/lack of consideration, promissory estoppel, RICO violations and unfair trade.
Friedman calculates treble damages of the money he lost by forgoing other work as $134,973,000.
He is represented by Alan Kaufman, of New York City.
A spokesman for Palladyne International told Courthouse News in an email: "These entirely untrue and ludicrous allegations have been made by a former employee who ... worked with us for just two months before being dismissed for gross misconduct. The fact that he has now filed a suit demanding damages of over US$500 million demonstrates the absurd nature of his claims, and we are taking legal action to protect the company."
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