Southway v. Central Bank of Nigeria

Decision Date05 July 2001
Docket NumberNo. CIV.A.96-B-2540.,CIV.A.96-B-2540.
Citation149 F.Supp.2d 1268
PartiesHenry T. SOUTHWAY, Southway Construction Company, Inc., Douglas Houghton, Randy Thurston, J.E. Losavio, Jr., and Russ Gray, doing business as Gray Real Estate, Plaintiffs, v. CENTRAL BANK OF NIGERIA, Republic of Nigeria, the Law Firm of Kirk P. Brown, P.C., Kirk Patterson Brown, Helen Tomicich, also known as Helen Tomicich Brown, [Both Browns] individually and doing business as the Communications Connection, Defendants.
CourtU.S. District Court — District of Colorado

CO, Karrick A. Burrows, Karrick A. Burrows, Law Office, Pueblo, CO, for plaintiffs.

Gregory William Smith, Hamilton & Faatz, Denver, CO, Steven David Plissey, Michael A. Williams, Williams, Youle & Koenigs, Denver, CO, David H. Fromm, Brown, Gavalas & Fromm, LLP, New York City, for Central Bank of Nigeria and Republic of Nigeria.

Kirk Patterson Brown, Pueblo, CO, pro se.

MEMORANDUM OPINION AND ORDER

BABCOCK, Chief Judge.

Plaintiffs Henry T. Southway, Southway Construction Company, Inc., Douglas Houghton, Randy Thurston, J.E. Losavio, Jr., and Russ Gray, doing business as Gray Real Estate, bring claims against the Central Bank of Nigeria (CBN), Republic of Nigeria, (collectively the "Nigerian Defendants"), The Law Firm of Kirk P. Brown, P.C., Kirk Patterson Brown, Helen Tomicich, also known as Helen Tomicich Brown, individually and doing business as The Communications Connection. Plaintiffs commenced this civil action on November 1, 1996, alleging violations of the Racketeer Influenced and Corrupt Organizations Act of 1970, 18 U.S.C. §§ 1961-1968 (1994). The Nigerian Defendants move for summary judgment. The motion is adequately briefed and oral argument will not materially aid its resolution. For the reasons set forth below, I grant the Nigerian Defendants' motion for summary judgment.

I. Facts and Procedural History

The following facts are undisputed and are largely set out in Southway v. Central Bank of Nigeria, 198 F.3d 1210 (10th Cir. 1999) and Southway v. Central Bank of Nigeria, 994 F.Supp. 1299 (D.Colo.1998). Plaintiffs are residents of southern Colorado. Defendants Kirk Patterson Brown (Mr. Brown) and Helen Tomicich Brown (Mrs. Brown) are also residents of southern Colorado. Mr. Brown is an attorney licensed to practice law in the State of Colorado and operates a law firm in Pueblo, Colorado.

In November 1995, Mr. Brown was contacted in Pueblo by a Nigerian. The person claimed to be a representative of Garuba & Associates or Garuba & Sons ("Garuba"), a construction contracting firm. Garuba's representative claimed the company had been hired to perform work for the Nigerian National Petroleum Corporation (NNPC). The NNPC owed Garuba approximately $21,000,000, and wanted an offshore account in which to deposit the money and an escrow agent to settle all claims with subcontractors and suppliers prior to disbursing remaining funds to Garuba. It was stated that Mr. Brown would receive a percentage of the funds if he claimed to be a subsidiary of the original foreign firm and allowed use of his bank account.

Mr. Brown agreed that his company, The Communication Connection, would serve as escrow agent for Garuba in return for 1% of the contract proceeds, or $210,000. He asked Garuba to assign the contract to The Communication Connection, and believed that the assignment had been filed with the Nigerian government, although he never saw a copy of the assignment. He also hired a purported attorney, Mr. Eguaibor, to verify the legitimacy of all transactions.

Shortly thereafter, on November 30, 1995, Mr. Brown sent a letter, via facsimile transmission, to "Dr. T.S. Adedipe, Office of the Director General, Contract Review Panel, Federal Secretariat Complex" in Ikoyi-Lagos, Nigeria. The letter appears on letterhead from "The Communication Connection, Inc.," located at 196 Alhambra, Pueblo, Colorado. Mr. Brown signed the letter as "Kirk P. Brown, Corporate Secretary." The letter requests "settlement" of a bill past due in the amount of $21,320,000.00. The letter references "Contract No. NNPC/PED/2039-X92," regarding "Supply of Heavy Duty Crude Oil Passage Drilling Machines and Calibrators for Port-Harcourt, Warri, and Kaduna Refineries." It requests immediate wire transfer of such funds to Mr. Brown's bank account in Pueblo.

This letter, together with six other letters attached to and incorporated within the Complaint, evidence communications between Mr. Brown and people purporting to be representatives of the Republic of Nigeria, NNPC, and CBN. All communications reference "Contract No. NNPC/ PED/2039-X92" and appear on official-looking letterhead, bearing various stamps and signatures. Over time, the letters began to demand payment of various fees prior to disbursement of the $21,000,000. Because Garuba expressed difficulty raising the necessary funds, Mr. Brown offered to raise the funds and pay the fees in return for a commission of $2,100,000. Garuba agreed.

The first of the six communications is a letter from "Bunu Isiaka, Debt Reconciliation Officer of CBN's Office of Debt Reconciliation Committee, Foreign Operations Department in Tinubu Square, Lagos, Nigeria" to Mr. Brown, "The Managing Director, Communications Connections, Inc.," dated February 3, 1996 (Isiaka Letter). The Isiaka Letter directs Mr. Brown to pay a 1% stamp duty fee of $213,200.00, via wire transfer, to the account of "M.M.B. LTD." at "Citibank N.A." in New York. The Isiaka Letter identifies the beneficiary of such account as "A. Dan-Azumi."

The second is a letter from "Dr. B.O. Eguaibor, Principal Partner, Eguaibor & Eguaibor, Solicitors and Advocates, Ikeja, Lagos State" to Mr. Brown dated February 7, 1996 (First Eguaibor Letter). The Eguaibor Letter acknowledges receipt of $2,000.00 from Mr. Brown as payment for legal representation regarding receipt of the contract funds. The Eguaibor Letter instructs Mr. Brown to transfer an additional $21,320.00 for payment of a "Bond Fee."

The third is another letter from "Dr. B.O. Eguaibor, Principal Partner, Eguaibor & Eguaibor, Solicitors and Advocates, Ikeja, Lagos State" to Mr. Brown dated February 21, 1996 (Second Eguaibor Letter). The Second Eguaibor Letter states that Dr. Eguaibor has signed the necessary papers to release the over-invoiced funds to Mr. Brown and instructs Mr. Brown to remit $100,000.00 to Eguaibor & Eguaibor after receipt of the over-invoiced funds.

The next is a letter from "Dr. M.R. Rasheed, Director, Foreign Operations Department" of CBN to Mr. Brown, "The Managing Director, Communications Connections, Inc.," dated March 19, 1996 (First Rasheed Letter). The First Rasheed Letter acknowledges receipt, via wire transfer, of $32,000.00 from Mr. Brown for "Handling/Cable/Signing Fees."

The fifth communication is a letter from "Dr. M.R. Rasheed, Director, Foreign Operations Department" of CBN to "Alberta L. Vega" of the Pueblo District Office of "The Honourable Senator Ben Nighthorse Campbell, United States of America Senate" dated March 25, 1996 (Second Rasheed Letter). The Second Rasheed Letter states that Communications Connections, Inc. will receive payment of $21,320,000.00 less "Refund Tax" as soon as Communications Connections, Inc. satisfies its "obligation in regard to the stamp duty payment of $213,200.00."

The last is a letter from "Major General Joe Garba" of the "Foreign Exchange Allocation Department, Office of the Presidency Garki District Office, Abuja, Nigeria" to Mr. Brown of "Communications Connections, Inc. c/o Law Firm of Kirk P. Brown" dated April 12, 1996 (Garba Letter). The Garba Letter, which appears on official-looking government letterhead bearing various stamps and signatures, directs Mr. Brown to pay $319,800.00 to the account of "Gulf Bank Auto Account" at "Bankers Trust" in New York. The Garba letter identifies the beneficiary of such account as "Alvan Pharood."

In March 1996, Mr. and Mrs. Brown, purportedly short the funds necessary to take full advantage of this opportunity, contacted Plaintiffs Randy Thurston (Thurston) and J.E. Losavio, Jr. (Losavio) (himself a lawyer and former Colorado State district attorney) regarding an investment opportunity. Mr. and Mrs. Brown offered Thurston and Losavio the opportunity to invest in a contract between The Communications Connection, Inc. and Nigeria. Mr. and Mrs. Brown encouraged Thurston and Losavio to invest $213,200.00 to pay for "stamp duties" and enable the transfer of $21,300,000.00 to the trust account of the Law Firm of Kirk. P. Brown, P.C. Mr. and Mrs. Brown represented that The Communications Connection, Inc. and Mr. Brown would receive a commission of $2,100,000.00 from CBN. They offered to "split" the commission with Thurston and Losavio, entitling Thurston and Losavio to $1,065,00.00 in return for their $213,200.00 investment. Thurston and Losavio accepted. On March 27, 1996, Mr. and Mrs. Brown, Thurston, and Losavio entered into a "Reimbursement Agreement" and "Indemnity Agreement" memorializing the transaction.

In April 1996, Mr. Brown contacted plaintiff Russ Gray (Gray) regarding the Nigeria transaction. Mr. Brown represented to Gray that he was a party to a financial transaction with Nigeria involving millions of dollars. Mr. Brown advised that the transaction would close in thirty days, but Mr. Brown had insufficient funds to fulfill his financial obligation. Gray, doing business as Gray Real Estate, paid Mr. Brown $50,000.00.

Also in April 1996, Mr. Brown contacted plaintiff Henry T. Southway (Southway). Mr. Brown represented to Southway that CBN would transfer millions of dollars to Mr. Brown's trust account, but that Mr. Brown needed to pay certain fees to exchange Nigerian currency for United States dollars. In consideration for Southway's payment of $160,000.00, Mr. Brown offered to pay Southway $800,000.00 "upon receipt of the contract funds into...

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