AHAB Wins New York Appeal in Al Sanea Bank Fraud Case

Court Cites Importance of U.S. Jurisdiction Over Banking System

Sep 25, 2012, 17:36 ET from AHAB

WASHINGTON, Sept. 25, 2012 /PRNewswire/ -- Today the ­­­Appellate Division of the Supreme Court of New York reversed a decision in a dispute involving Ahmad Hamad Algosaibi & Brothers Company (AHAB), Maan Al Sanea, and Mashreq Bank.  Mashreq sued AHAB in 2009 over a $150 million uncompleted foreign exchange transaction.  AHAB brought a third party claim against Maan Al Sanea, asserting the funds to complete the transaction had been stolen by him from AHAB's New York bank account, and counterclaimed against Mashreq for knowingly assisting Al Sanea's Ponzi scheme.   

The previous ruling dismissed the case on grounds of "forum non conveniens," suggesting that the dispute should be tried in Saudi Arabia or elsewhere in the Middle East.  In the court's majority opinion issued today, the Honorable James M. Catterson writes, "New York has a compelling interest in adjudicating controversies that implicate its preeminent position in the international banking system, and in any event, [Maan Al Sanea] failed to demonstrate New York is an inconvenient forum."

"We are pleased that the appellate court has recognized the critical role of New York courts in massive international frauds that use the U.S. banking system.  In today's world, frauds can involve numerous countries, none of which may have the resources or critical involvement to investigate.  The U.S. financial system must be a backstop against fraud," said Eric Lewis, AHAB's chief legal coordinator.  "Foreign parties should not be allowed to use New York banks to perpetuate massive financial frauds, and escape scrutiny simply by engineering the wrongdoing from outside the country."

Although Mr. Al Sanea has repeatedly issued public statements rejecting AHAB's charges, to date he has declined to submit any defense to AHAB's claims in court.

On June 13, 2012, the Grand Court of the Cayman Islands issued an interim payment order today in favor of Ahmad Hamad Algosaibi & Brothers (AHAB) against Maan Al-Sanea in the amount of $2.5 billion. The interim payment order reflects the Cayman Court's prediction that AHAB will be entitled to recover at least $2.5 billion from Al Sanea, and AHAB has indicated that they will undertake final quantification at the end of the case on the full $9.2 billion claim.