Bilalov v. Gref
| Decision Date | 13 September 2022 |
| Docket Number | 20 Civ. 9153 (AT) |
| Parties | AKHMED GADZHIEVICH BILALOV, an individual, Plaintiff, v. HERMAN GREF, SBERBANK CIB USA, INC., SBERBANK OF RUSSIA PJSC, and DOES 1-100 inclusive, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Plaintiff Akhmed Gadzhievich Bilalov, brings this action against Defendants Herman Gref, Sberbank CIB USA, Inc. (“Sberbank USA”), Sberbank of Russia PJSC (“Sberbank Russia”), and Does 1-100 based upon violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962, common law fraud, unjust enrichment, malicious abuse of process, conversion, and the Alien Tort Statute (the “ATS”), 28 U.S.C. § 1350. See generally Sec. Amend. Compl., ECF No. 51. Plaintiff's claims arise, primarily, out of an alleged conspiracy to deprive him of his ownership interest in Krasnaya Polyana (the “Company”), a Russian company he owned with his brother. See generally id. Gref and Sberbank Russia (together, the “Russian Defendants”) move to dismiss Plaintiff's claims under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act (the “FSIA”), 28 U.S.C. § 1330, and, in the alternative, under the doctrine of forum non conveniens in favor of adjudication in Russia, Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, or Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. See Russian Defs. Mem., ECF No. 59; Russian Defs. Supp. Mem., ECF No. 73. Sberbank USA moves to dismiss Plaintiff's claims under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. U.S. Def. Mem., ECF No. 62. For the reasons stated below, Defendants' motions are GRANTED.
BACKGROUND[1]
In 2006, Plaintiff and his brother purchased the Company, a ski resort located in the Sochi Region of Russia, and became joint owners of 84.85% of the Company's shares. Sec Amend. Compl. At 10 ¶¶ 44-46.[2] In 2007, the Olympic Committee awarded the 2014 Winter Olympic Games (the “Olympics”) to the City of Sochi, and the Company was identified as an entity for involvement in a prospective Olympic construction project, which substantially increased the Company's value. Id. at 10 ¶ 47.
In November 2007, Gref was named the Chairman of Sberbank Russia, and, in 2008, “under Sberbank[ Russia's] initiative and pursuant to the direction of the Government of the Russian Federation,” Gref and others became investors in the Company. Id. at 11 ¶¶ 48-49. After becoming investors, the Russian Defendants progressively obtained more control over the Company and acquired more shares through allegedly improper actions that forced the Company to take on more debt. Id. at 11-13 ¶¶ 49-58. As of 2010, Plaintiff and his brother owned 60% of the Company. Id. at 13 ¶ 59. In 2012, after the Russian Defendants switched subcontractors for construction projects related to the Olympics and facilitated a failed investment, a conflict arose between Plaintiff's brother and Gref, which resulted in Plaintiff's brother being removed from the management of the Company and Gref taking control. Id. at 13-15 ¶¶ 60-71. These actions also led to Plaintiff's shares being diluted to 41.429%. Id. at 14 ¶ 69.
On February 2, 2013, at a meeting that included Gref, the Vice Prime Minister of Russia, Dmitry Kozak, and Plaintiff's brother, an agreement was reached whereby, after the conclusion of the Olympics, one third of the Company's assets would be transferred to Plaintiff and his brother, and the other two thirds would be transferred to Sberbank Russia. Id. at 15 ¶ 72. But, in a later meeting that same month involving Gref, Kozak, and Plaintiff, Gref demanded that Plaintiff transfer all shares of the Company to Gref and his affiliates. Id. at 15 ¶ 74. Gref also stated that, if the shares were not transferred quickly, “Plaintiff and his family personally would face serious problems, including bodily harm or death.” Id. at 15 ¶ 75. Gref and others also presented a report to the President of the Russian Federation, Vladimir Putin, on live television, in which Gref falsely indicated that Plaintiff's brother was responsible for the failure to meet construction deadlines and increased construction costs. Id. at 16 ¶ 77.
In March 2013, Plaintiff's brother met with an associate of Gref's, Mikhail Gutseriev, who threatened Plaintiff and his family at Gref's direction with “violence, continuation of baseless and unlawful criminal prosecution[,] and [the deprivation of] all of their possessions” if Plaintiff and his brother did not transfer their remaining shares to him for $20 million, which was far less than their actual value of $328 million. See id. at 17 ¶¶ 82-84; id. at 19-20 ¶¶ 96-101. Although Gutseriev made certain promises to Plaintiff's brother regarding the sharing of acquired assets, these promises were not kept. See id. at 17 ¶ 86; id. at 18 ¶ 91. Plaintiff and his brother transferred the shares, although Plaintiff asserts he consented to transfer only a portion of his shares. Id. at 17-18 ¶¶ 87-89.
At some point, Sberbank USA acquired a company known as Troika Dialog (“Troika”), which was then acquired by Sberbank Russia in March 2011 and is owned, operated, and managed by Sberbank Russia and Sberbank USA. See id. at 21 ¶¶ 103-106; id. ¶ 116. Troika operates a financial network known as the Troika Laundromat through which it sets up shell companies and moves money between them to disguise the recipients. Id. at 21-23 ¶¶ 103-18. Defendants have used the Troika scheme to move money they acquired through their “Reiderstvo” activities.[3] Id. at 22 ¶ 111. Plaintiff alleges, “[u]pon information and belief,” that assets rightfully belonging to him were transferred in the United States through the Troika Laundromat to “avoid detection by authorities and to circumvent U.S. sanctions.” Id. at 23-24 ¶ 119.
Plaintiff claims that, in 2013, Defendants bribed the Russian Interior Ministry to open a criminal investigation against Plaintiff and his brother. Id. at 24 ¶ 120. Although it is unclear if the charges have been dropped, no court orders have been issued to arrest Plaintiff or his brother. Id. at 24 ¶ 121. Plaintiff also alleges that, on April 27, 2013, Defendants “either directly or through coconspirators and intermediaries” poisoned Plaintiff with mercury. See id. at 15-15 ¶ 76; id. at 24 ¶ 123.
In May 2016, Plaintiff and his family fled Russia and moved to New York. Id. at 24 ¶ 124. Then, in the Spring of 2018, Plaintiff decided to “back channel members of the ‘inner circle' in an effort to recover some of his assets.” Id. at 24-25 ¶ 125.[4] Plaintiff reached out to Kirill Androsov, a close friend and associate of Gref, to attempt to settle his claims against Defendants arising out of their takeover of the Company. Id. at 25 ¶ 126. Although Androsov initially indicated that Gref was interested in resolving the conflict, Defendants, in actuality, had no interest in negotiating and instead filed false charges against Plaintiff. Id. at 25 ¶¶ 127-29. On March 4, 2018, Defendants, “acting through intermediaries,” bribed foreign officials to obtain an International Criminal Police Organization (“Interpol”) “[R]ed [N]otice” or “diffusion” against Plaintiff, with the intention of causing his deportation to Russia, where he could be imprisoned and/or executed. Id. at 25 ¶ 131.
In April 2019, Androsov informed Plaintiff that a representative of Defendants would meet with him in May in San Francisco. Id. at 26 ¶ 133. Plaintiff went to San Francisco and met with Defendants' representative, Alexander Igorevich, who had traveled from Russia. Id. at 26 ¶ 135. Igorevich told asserts that Reiderstvo “commonly includes . . . the use of shell companies in various jurisdictions . . . to hide the beneficial owners.” Id. at 3 ¶ 8.
Plaintiff that he worked for Sberbank Russia and represented the interests of both the Russian Federation and Sberbank Russia. Id. During their conversation, Igorevich said that Defendants had no intention of resolving their conflict with Plaintiff and threatened that, if Plaintiff proceeded with an action against Defendants, it would be perceived as “an act of treason” and the “poisoning would be nothing compared to what may happen to both Plaintiff and his family.” Id. at 26 ¶ 137. Igorevich also indicated that Defendants will have Plaintiff arrested. Id.
After this meeting, Plaintiff returned to New York. Id. at 27 ¶ 138. He called Androsov and, when Plaintiff indicated he would fight for his property, Androsov told him to “be ready for a new wave of problems.” Id. (quotation marks omitted). In July 2019, Plaintiff was approached by two men outside of his apartment who were sent by Defendants. Id. at 27 ¶ 139. The men told him “that they know where he lives, and they can get him anywhere.” Id. Two weeks later, one of the two men approached Plaintiff on Plaintiff's way home and showed him pictures of Plaintiff's wife entering and exiting their apartment in Miami. Id. at 27 ¶ 140. The man told Plaintiff to “think of his family.” Id.
In August 2019, Plaintiff contacted Androsov again to try to resolve his conflict with Defendants. Id. at 27 ¶ 141. A few days later, Plaintiff was greeted by the two men who told him that Alexey Nikolaevich, a Russian army official, wanted to meet him later that week. Id. at 27-28 ¶¶ 14142. That Friday, Plaintiff met with Nikolaevich at a hotel bar. Id. at 28 ¶ 142. Nikolaevich told Plaintiff that “trouble was coming,” and that he would soon be arrested and extradited to Russia, where he would be imprisoned in Lefortovo Prison, a place where “many interesting things may happen[,] including suicide.” Id. Fearing for his life, Plaintiff went to Miami....
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