Aldabe v. Cohen

Decision Date30 March 2022
Docket NumberCivil PJM 21-cv-803
PartiesFERMIN ALDABE Plaintiff, v. JONATHAN COHEN et al., Defendant.
CourtU.S. District Court — District of Maryland


Pro se Plaintiff Fermin Aldabe is a man distressed because the Atlantic Bank International LLP (AIBL) in Belize, where his wife's company had or has an account out of which she purportedly owed Aldabe money, entered into an agreement with the Federal Trade Commission (FTC) to settle the FTC's claim that AIBL facilitated a wide-scale land scam in Belize in connection with an enterprise known as Sanctuary Belize. See Court's Opinion of August 28, 2020, In re Sanctuary Belize Litigation, PJM 18-3309, ECF No 1020 (D. Md. Aug. 28, 2020). In his lawsuit he asks for damages in that, among other things, the Settlement Agreement in question (to which he was not a party) has caused him harm requiring twenty years of psychotherapy as well as a number of physical ills. Nevertheless, despite his effort to pour his concerns into molds of cognizable vessels of legal recovery, he has utterly failed to do so. He has seized upon legal terms here and there that do not, all in all, in any way satisfy the requirements for legitimate recovery against the multiple named actors he believes are responsible for his suffering. Even so, the Court respectfully offers him the benefit of its evaluation of the claims he is attempting to assert.[1] The Court has before it five motions for resolution.

First a Motion to Substitute by the United States (ECF No. 6), and a Motion for Leave to File a Surreply thereto (ECF No. 18).

Next, a Motion to Dismiss by Defendant Creighton Magid, who served as counsel for AIBL in the underlying Sanctuary Belize litigation (ECF No. 20), and a Motion for Leave to File a Surreply thereto (ECF No. 25).

Finally a Motion to Dismiss by the Belize Defendants - individuals and entities associated with AIBL (ECF No 32).

For the reasons that follow, the Court GRANTS all the motions. With respect to the two motions to dismiss, ECF No. 20 and 32, the Court DISMISSES WITH PREJUDICE all Counts against those Defendants.

I. Factual and Procedural Background

a. The In re Sanctuary Belize Litigation

In 2018, the FTC initiated suit against numerous defendants who allegedly were, in violation of Section 5(a) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 45(a) and the Telemarketing Sales Rule ("TSR"), 16 C.F.R. § 310.3, perpetrating a large-scale land sales scam in the Central American country of Belize. The defendants in that case (AIBL among them) were said to be part of a common enterprise known as "Sanctuary Belize." See Opinion, In Re Sanctuary Belize, supra, ECF No. 1020. The FTC alleged that the defendants had defrauded American consumers by selling them lots at the Sanctuary Belize property, advertising them as part of a resort which would have top-shelf amenities and offer certain investment gains, when in reality the development, as advertised, was essentially a sham.

As part of the case, in November 2018 j the Court entered several orders freezing the assets of AIBL. See In re Sanctuary Belize, ECF Nos. 13, 14, 34. On April 12, 2019, the Central Bank of Belize revoked AIBL's license to operate and appointed a liquidator, Julian Murillo, to take care of its affairs. See In re Sanctuary Belize, ECF No. 607 ¶ 4. In June 2019, the FTC and AIBL entered into a Settlement Agreement, approved by the Court, whereby certain AIBL assets would transfer to the Receiver who had been appointed to manage restitution to victims of the Sanctuary Belize scheme. See In re Sanctuary Belize, ECF No. 607. Meanwhile, liquidation proceedings against AIBL moved forward in Belize. See Def. Br. ECF No. 32-1 at 3; In re Ail. Int'l Bank Ltd., No. 19-bk-1286, ECF No. 86 (S.D. Fl. Sept. 19, 2019) (recognizing the Belize liquidation proceeding).

On August 28, 2020, following a trial before this Court on the merits, the Court issued a lengthy Opinion consisting of Findings of Fact and Conclusions of Law, granting a permanent injunction against certain Defendants, and ordering them to make restitution on behalf of defrauded consumers. See In re Sanctuary Belize, supra, ECF No. 1020. That decision, now on appeal at the Fourth Circuit, has no impact on the resolution of Aldabe's current claims.

b. Aldabe 's Claims

Aldabe raises twenty claims against Defendants including, inter alia, negligent misrepresentation, negligent personal injury, and intentional infliction of emotional distress.

The Complaint names fifteen Defendants, who can be divided into three groups: (1) the FTC Defendants: Johnathan Cohen, Joseph J. Simons, Rebecca Kelly Slaughter, Noah Joshua Phillips, Rohit Chopra, Christine S. Wilson, Benjamin J. Theisman, Amanda B. Kostner, Khouryanna DiPrima; (2) the Belize Defendants: Atlantic International Bank Ltd. (AIBL), Julian Murillo (AIBL liquidator), the Central Bank of Belize, Joy Grant (Governor of Central Bank of Belize), and the Government of Belize; and (3) Creighton Magid (AIBL's counsel in the Sanctuary Belize litigation).

According to his Complaint, Aldabe headed a carbon offset project in Belize from 2011 to 2016. Compl. ¶ 27-28. Around early 2016, Aldabe's wife formed a company known as "Palma Efuus Ltd.," in Belize, which opened a bank account at AIBL. Id. ¶ 29. Aldabe states that it was he who ran the day-to-day operations of Palma Efuus Ltd., and contracted with himself to produce carbon credits which Palma Efuus Ltd. would broker and sell. Id. ¶ 21. Proceeds from the sales were allegedly deposited in the AIBL account. Id. ¶ 32.

Aldabe says that when the Court froze AIBL's assets, it did so in an amount greater than AIBL's assets and equities. This, Aldabe alleges, led to a run on the bank. Id. ¶ 37. The Government of Belize thereafter revoked AIBL's banking charter and placed it in liquidation. Id. ¶ 37. Thereafter the Government-appointed liquidator of AIBL negotiated a settlement of the litigation with the FTC. Id. at ¶¶ 40, 48. Aldabe alleges that this settlement - in the amount of some $23 million - resulted in depositors and their beneficiaries, such as Aldabe, having to personally shoulder the cost. Id. ¶ 48.

As a result of the FTC action, Aldabe says that he was deprived of access to "his" funds held in the Palma Efuus Ltd. account with AIBL for more than 12 months, and that he ultimately suffered financial losses of thirty-one percent of the value of "his" assets.[2] Id. ¶ 53. The loss of access to the funds, he says, caused him stress, since the funds were intended to pay for his son's senior year of college. Id. ¶ 45. Aldabe alleges that the stress resulted in numerous physical and mental health harms, including "premature aging," "thickening of the heart walls," and diarrhea. Id. at 54. He states that he contacted the FTC to inform them of the impact the actions against AIBL was having upon him, namely emotional distress and physical and financial harm. Id. ¶ 42.

Aldabe seeks $1.2 million to cover medical bills (for four psychotherapy visits a week over twenty years to "recover from the intentional emotional distress inflicted on him"); $5 million in non-economic damages; punitive damages; and interest. He does not apparently seek economic damages (nor would it affect the Court's decision if he does).

c. Procedural History

Aldabe filed his Complaint in this Court on March 30, 2021. ECF No. 1. Over the next three months, he filed multiple motions seeking to recuse the undersigned Judge from deciding the case on the ground that this Judge was a "direct participant of the acts complained of... and therefore has a stake in the outcome of the case." ECF Nos. 4; 7, 9. All those motions were denied. ECF Nos. 5, 8, 12.

On May 3, 2021, the United States filed a motion to substitute the United States for the individual FTC Defendants. ECF No. 6. Aldabe responded with a cross motion, seeking a stay of the motion to substitute pending limited discovery regarding the issue of scope of employment. ECF No. 11. After the FTC replied, Aldabe moved for leave to file a surreply. ECF No. 18.

Aldabe then moved for default judgment against Defendant Magid, which the Court denied. ECF Nos. 14, 17.

On July 6, 2021, Defendant Magid filed a motion to dismiss. ECF No. 20. Aldabe responded, and Magid replied. ECF Nos. 22, 24. Aldabe again sought leave to file a surreply. ECF No. 25.

On September 17, 2021, the Belize Defendants filed a Motion to Dismiss, ECF No. 32, which Aldabe opposed, ECF No. 34. Defendants did not reply.

The Court addresses the outstanding motions.

III. Discussion

a. Motion to Substitute

In its Motion to Substitute, ECF No. 6, the United States seeks to substitute itself for the individual FTC Defendants.[3] In the Motion, the United States cites the Federal Tort Claims Act, which provides that the exclusive remedy for a tort committed by employees of the United States Government acting within their scope of employment is a suit against "the United States." The FTCA does not provide for any remedy against federal employees in their individual names for torts they may commit while acting in the scope of their employment. See 28 U.S.C. § 2679(b)(1) (noting that FTCA provides the exclusive remedy for alleged torts committed by federal employees acting in the scope of their employment); 28 U.S.C. § 2674 (only permitting FTCA suit against the "United States" as a defendant). Under the FTCA, the United States may move to substitute itself as the defendant where the employee was acting within their scope of employment. See, e.g., Ross v. Biyan, 309 F.3d 830, 834 (4th Cir. 2002) (reviewing District Court order on defendant's motion to substitute the United States as party defe...

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