United States Of America v. Besneli et al

Filing 23

OPINION & ORDER: For the reasons above, Besneli's motion to dismiss the complaint for lack of personal jurisdiction is GRANTED. In light of the Court's conclusion, it is not necessary to address whether a jurisdictional finding in this matter would satisfy due process or Besneli's arguments to dismiss this action for failure to state a claim upon which relief can be granted. If the Government wishes to amend the complaint, it shall move this Court to do so no later than 30 days from the date of this Opinion. Otherwise the Court will enter an order closing the case. (Signed by Judge John F. Keenan on 1/16/2018) (mro)

Case 1:09-md-02013-PAC Document 57

Filed 09/30/10 Page 1 of 45
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: 01/16/2018

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------ X
UNITED STATES DISTRICT COURT
:
UNITED STATES OF AMERICA,
:
SOUTHERN DISTRICT OF NEW YORK
Plaintiff,
:
-----------------------------------------------------------x
::
In re FANNIE MAE 2008 SECURITIES
08 Civ. 7831 (PAC)
-against::
No. 09 MD 2013 7339 (JFK)
14 Civ. (PAC)
LITIGATION
OPINION & ORDER
::
HASAN BESNELI and
::
OPINION & ORDER
SABA, INC.,
:
-----------------------------------------------------------x
:
Defendants.
:
------------------------------ X
HONORABLE PAUL A. CROTTY, United States District Judge:
APPEARANCES
FOR PLAINTIFF UNTED STATES OF AMERICA
Cristine Irvin Phillips
BACKGROUND1
Li Yu
The early years of this decade saw a boom in home financing which was fueled, among
FOR DEFENDANT HASAN BESNELI
other Pro se low interest rates and lax credit conditions. New lending instruments, such as
things, by
JOHN F. mortgages (high creditStates Districtmortgages (low-documentation loans)
subprime KEENAN, United risk loans) and Alt-A Judge:
Before the Borrowers Hasan Besneli’s motion to dismiss the
kept the boom going. Court isplayed a role too; they took on unmanageable risks on the
Government’s the market would which seeksand that refinancing options would always be
assumption that complaint, continue to rise a civil penalty against
Besneli in the future. U.S.C. discipline was lacking in the system. Mortgage of 18
available under 12 Lending § 1833a for alleged violations originators did
U.S.C. §§ 1341 and 1343. Construing Besneli’s pro se motion to
not hold these high-risk mortgage loans. Rather than carry the rising risk on their books, the
raise the strongest arguments that it suggests, the Court has
originators sold their loans into the secondary mortgage market, often as securitized packages
determined that the grounds for Besneli’s motion are lack of
known as mortgage-backed securities (“MBSs”). MBS markets grew almost exponentially.
personal jurisdiction under Federal Rule of Civil Procedure
But then the housing bubble burst. In 2006, the demand for housing dropped abruptly
12(b)(2) and failure to state a claim upon which relief can be
and home prices began to fall. In light of the changing housing market, banks modified their
granted under Federal Rule of Civil Procedure 12(b)(6). For the
lending practices and became unwilling to refinance home mortgages without refinancing.
reasons below, the Court concludes that the Government’s
complaint does notallestablish as “(¶ _)” or to facie showing the Amended Complaint,
a prima the “Complaint” are to of personal
1
Unless otherwise indicated, references cited
dated June 22, 2009. For purposes of this Motion, all allegations in the Amended Complaint are taken as true.

1

1

jurisdiction and, accordingly, grants Besneli’s motion to
dismiss.
I. Background
A. Factual Background
Besneli is a Turkish citizen residing in Istanbul, Turkey.
(Compl. ¶ 10, ECF No. 1 (filed Sept. 10, 2014).)

From 2003

until at least 2010, Besneli served as an agent for SABA, Inc.
(“SABA”), a business incorporated and headquartered in Tennessee
that operates as an exporter of U.S.-made goods. (Id. ¶¶ 9-10.)
In early 2003, Besneli, on behalf of SABA, negotiated an
agreement with Basbakani Baskanliginda Darussafaka Cemiyeti
(“Darussafaka”), a non-profit organization located in Istanbul.
(Id. ¶¶ 1, 11.)

Besneli agreed to act on Darussafaka’s behalf

to procure a loan and loan guarantee for the completion of
several construction projects in Istanbul and Urla, Turkey
(collectively, the “Urla Project”). (Id. ¶¶ 2, 29.)

SABA was to

act as exporter for all U.S. goods purchased with loan funds in
connection with the Urla Project. (Id. ¶ 29.)
Jennifer Windus, who performed work for Besneli, SABA, and
Darussafaka, prepared the loan and guarantee applications,
respectively, in connection with the Urla Project. (Id. ¶¶ 14,
30.)

Ultimately, Darussafaka obtained a loan from Deutsche

Bank’s branch office in New York (“Deutsche Bank”). (Id. ¶ 13.)
On March 17, 2004, Deutsche Bank, Darussafaka, and the Export2

Import Bank of the United States (the “Ex-Im Bank”) entered into
a credit agreement and Darussafaka signed a promissory note for
an amount in excess of $38 million. (Id. ¶ 35.)

The complaint

does not specify who signed the credit agreement or promissory
note on Darussafaka’s behalf.
The Ex-Im Bank is the official export credit agency of the
United States. (Id. ¶ 16.)

It offers loan guarantees to foreign

entities that wish to use loan funds to purchase U.S.-made
goods. (Id. ¶ 17.)

In determining whether to guarantee a loan,

the Ex-Im Bank relies upon the application by or on behalf of a
foreign borrower as well as all relevant contractual agreements.
(Id. ¶ 21.)

In the event that a borrower defaults, the lender

has the right to make a claim to the Ex-Im Bank for the unpaid
loan funds that are the subject of the guarantee. (Id. ¶ 22.)
To fulfill its statutory mission of maintaining or
increasing employment of U.S. workers, see 12 U.S.C. §
635(a)(1), the Ex-Im Bank places various conditions on its loan
guarantees. (Compl. ¶¶ 18-19.)
here.

Two such conditions are relevant

First, during the time period of the Urla Project, no

more than 15 percent of loan funds could be used by a borrower
for “local costs,” including labor costs and the cost of
materials not made in the United States. (Id. ¶ 18.)

Second, a

borrower must provide a 15 percent down payment “towards the

3

total cost of all U.S.-made goods purchased.” (Id. ¶ 20 (citing
12 U.S.C. § 635(a)(2).)
Here, to comply with the Ex-Im Bank’s requirements, under
the proposed loan terms:

(1) SABA would use $28.8 million of

the loan funds to purchase U.S.-made goods that SABA would
export to Darussafaka, and (2) approximately $5 million in loan
funds would be available for local construction costs in Turkey.
(Id. ¶ 31.)

Additionally, in connection with the loan guarantee

application submitted to the Ex-Im Bank, SABA included a
Construction and Procurement Agreement (“CPA”) executed by SABA
and Darussafaka. (Id. ¶¶ 32-33.)

The CPA was signed by Besneli

as Vice President of SABA and provided that Darussafaka would
pay a down payment of 15 percent to SABA. (Id.)

The complaint

does not specify who signed the CPA on Darussafaka’s behalf.
The Government claims that SABA, Besneli, and Darussafaka
did not adhere to the proposed terms above, but rather conspired
to circumvent the Ex-Im Bank’s requirements.

At the first step

of the alleged scheme, SABA marked up the price of the U.S.
goods it purchased and exported to Darussafaka, resulting in the
expenditure of $28.8 million in loan funds for goods worth only
$16 million. (Id. ¶ 40.)

Besneli allegedly was aware of and

participated in the marking up of goods. (Id. ¶ 41.)

Then, the

extra funds generated through this strategy were deployed in two
ways.

First, Besneli, acting through a separate business
4

entity,1 channeled some of the funds to Darussafaka through
payments characterized as donations so as to skirt the Ex-Im
Bank’s restriction limiting the availability of loan funds for
local costs to 15 percent. (Id. ¶¶ 47-52.)

Second, SABA used

some of the funds to make the required down payment,
sidestepping the requirement that Darussafaka, as borrower,
provide the money for a down payment. (Id. ¶¶ 54-61.)

The

Government further contends that SABA ceded its responsibility
to provide progress reports to an individual named Unver Orer,
who, “with SABA and Besneli’s knowledge,” signed progress
reports containing inaccurate information to induce Deutsche
Bank to disburse loan funds. (Id. ¶¶ 62-67.)
On April 20, 2007, Darussafaka defaulted after making one
interest payment. (Id. ¶ 71.)

On September 13, 2007, Deutsche

Bank submitted a claim to the Ex-Im Bank for payment on the loan
guarantee. (Id. ¶ 72.)

The Ex-Im Bank ultimately paid the full

amount of the loan, plus accrued interest, totaling more than
$39 million. (Id.)
B. Procedural History
The Government filed the complaint in this matter on
September 10, 2014, naming Besneli and SABA as defendants in the
alleged scheme to defraud Deutsche Bank and the Ex-Im Bank.

That is, Bolzano Ltd., a “now-defunct shell company” owned and
operated by Besneli. (Compl. ¶ 12.)
1

5

Shortly thereafter, the Government and SABA reached a settlement
and SABA was dismissed from the suit. (See Stipulation and Order
of Settlement and Dismissal, ECF No. 4 (filed Sept. 17, 2014);
Consent Judgment, ECF No. 5 (filed Sept. 22, 2014).)

The

settlement, however, did not resolve the Government’s claims
against Besneli.
Being unable to locate Besneli, the Government requested
and received the Court’s permission to serve Besneli by email
and publication in Istanbul. (See Op. & Order, ECF No. 13 (filed
Aug. 12, 2015); Order, ECF No. 15 (filed Nov. 12, 2015).)

The

Government effected service via email on December 4, 2015 and
via publication throughout December 2015 and January 2016. (Gov.
Mem. of L. in Opp’n at 6, ECF No. 20 (filed June 6, 2016).)

On

January 8, 2016, the Government received a communication from
Besneli styled as a “response” to the complaint. (See Endorsed
Letter from Cristine Irvin Phillips to Hon. John F. Keenan at 1,
ECF No. 17 (filed Apr. 28, 2016).)

In light of Besneli’s pro se

status, the Court liberally construed Besneli’s response as a
motion to dismiss. (Id. at 2.)

After submitting its opposition

to Besneli’s pro se motion, the Government received Besneli’s
reply, which it filed as an attachment to a letter to the Court.
(Letter from Cristine Irvin Phillips to Hon. John F. Keenan Ex.
A, ECF No. 22-1 (filed Aug. 5, 2016).)

6

II. Discussion
Because Besneli is appearing pro se, the Court construes
his submissions liberally and interprets them to raise the
strongest arguments that they suggest. See Triestman v. Fed.
Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (per
curiam).

Among other contentions, Besneli asserts that he did

not visit the United States in connection with the Project Urla
loan application or guarantee and that Turkey is the proper
place of jurisdiction pursuant to “international legal
practices.”

The Court construes Besneli’s arguments as an

objection to this suit on the ground of lack of personal
jurisdiction under Rule 12(b)(2).

Relying on § 302(a)(1) of New

York’s Civil Practice Law, the Government contends that the
Court has jurisdiction over Besneli because “a court may
exercise personal jurisdiction over any non-domiciliary” who “in
person or through an agent” transacts “any business within” the
state of New York.
A. Applicable Law
“On a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(2), ‘the plaintiff bears the burden of
establishing that the court has jurisdiction over the
defendant.’” Elsevier, Inc. v. Grossman, 77 F. Supp. 3d 331, 341
(S.D.N.Y. 2015) (quoting DiStefano v. Carozzi N. Am. Inc., 286
F.3d 81, 84 (2d Cir. 2001)).

“In order to survive a motion to
7

dismiss for lack of personal jurisdiction, a plaintiff must make
a prima facie showing that jurisdiction exists.” Licci v.
Lebanese Canadian Bank, SAL, 732 F.3d 161, 167 (2d Cir. 2013)
(quoting Thomas v. Ashcroft, 470 F.3d 491, 495 (2d Cir. 2006)).
“All jurisdictional allegations ‘are construed in the light most
favorable to the plaintiff and doubts are resolved in the
plaintiff’s favor[.]’” Elsevier, 77 F. Supp. 3d at 341 (quoting
A.I. Trade Fin., Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir.
1993)).

However, the Court will not “draw argumentative

inferences in the plaintiff’s favor” and need not “accept as
true a legal conclusion couched as a factual allegation.” Licci
ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59
(2d Cir. 2012) (internal quotation marks and citations omitted).
“Determining personal jurisdiction over a foreign defendant
in a federal-question case . . . requires a two-step inquiry.”
Licci, 732 F.3d at 168.

First, the Court applies the forum

state’s long-arm statute. See Eades v. Kennedy, PC Law Offices,
799 F.3d 161, 168 (2d Cir. 2015).

Then, if the long-arm statute

permits personal jurisdiction, the Court must analyze “whether
personal jurisdiction comports with due process protections
established under the Constitution.” Id. (citing Chloé v. Queen
Bee of Beverly Hills, LLC, 616 F.3d 158, 163-64 (2d Cir. 2010)).

8

B. Analysis
“To establish personal jurisdiction under section
302(a)(1), two requirements must be met:

(1) The defendant must

have transacted business within the state; and (2) the claim
asserted must arise from that business activity.” Licci, 732
F.3d at 168 (quoting Solé Resort, S.A. de C.V. v. Allure Resorts
Mgmt., LLC, 450 F.3d 100, 103 (2d Cir. 2006)).

“[P]roof of one

transaction in New York is sufficient to invoke jurisdiction,
even though the defendant never enters New York,” so long as the
defendant’s activities in New York were “purposeful.” Chloé, 616
F.3d at 170 (quoting Kreutter v. McFadden Oil Corp., 522 N.E.2d
40, 43 (N.Y. 1988)).

“Purposeful activities are those with

which a defendant, through volitional acts, avails itself of the
privilege of conducting activities within the forum State, thus
invoking the benefits and protections of its laws.” Eades, 799
F.3d at 168 (quoting Fischbarg v. Doucet, 880 N.E.2d 22, 26
(N.Y. 2007)).
With regard to Besneli, the Government’s jurisdictional
allegations primarily rest on the acts of his purported agents,
Windus and Orer.

For example, Windus, who “performed work for

Besneli and SABA,” allegedly prepared the loan application for
Deutsche Bank, whose New York office extended the loan. (Compl.
¶¶ 13, 14.)

Windus, “acting as agent for SABA and on behalf of

Darussafaka,” also prepared the application for the Ex-Im Bank’s
9

guarantee. (Id. ¶¶ 14, 30.)

Once the loan was approved and

guaranteed, Orer, “who worked for Besneli in Turkey,” allegedly
provided false information to Deutsche Bank regarding the
progress of the construction project, which led to Deutsche
Bank’s disbursement of millions of dollars in loan funds. (Id.
¶¶ 66-67; see also Gov. Mem. of L. in Opp’n at 5.)
N.Y. C.P.L.R. § 302(a)(1) provides for jurisdiction over a
non-domiciliary defendant who “in person or through an agent
. . . transacts any business within the state” of New York.

“In

determining whether an agency exists under § 302, courts have
focused on the realities of the relationship in question rather
than the formalities of agency law.” CutCo Indus., Inc. v.
Naughton, 806 F.2d 361, 366 (2d Cir. 1986).

“To be considered

an agent for jurisdictional purposes, the alleged agent must
have acted in the state ‘for the benefit of, and with the
knowledge and consent of’ the non-resident principal.” Id.
(quoting Grove Press, Inc. v. Angleton, 649 F.2d 121, 122 (2d
Cir. 1981)).

“Some courts have also required the principal to

exercise ‘some control’ over the agent.” Bluestone Capital
Partners, L.P. v. MGR Funds Ltd., No. 98 CIV. 3128(WHP), 1999 WL
322658, at *2 (S.D.N.Y. May 20, 1999).
Even assuming that Windus and Orer are Besneli’s agents for
the purpose of establishing personal jurisdiction, the
Government fails to show that the Court’s exercise of personal
10

jurisdiction over Besneli would be proper.

The Second Circuit

has instructed that “[s]everal factors should be considered in
determining whether an out-of-state defendant transacts business
in New York[.]” Sunward Elecs., Inc. v. McDonald, 362 F.3d 17,
22 (2d Cir. 2004).

The factors include:

(i) whether the defendant has an on-going
contractual relationship with a New York
corporation; (ii) whether the contract was
negotiated or executed in New York and whether,
after executing a contract with a New York
business, the defendant has visited New York for
the purpose of meeting with parties to the
contract regarding the relationship; (iii) what
the choice-of-law clause is in any such contract;
and (iv) whether the contract requires
franchisees to send notices and payments into the
forum state or subjects them to supervision by
the corporation in the forum state.
Id. (quoting Agency Rent A Car Sys., Inc. v. Grand Rent A Car
Corp., 98 F.3d 25, 29 (2d Cir. 1996)).

In analyzing whether a

defendant has transacted business in New York, the Court looks
to “the totality of the defendant’s activities within the
forum.” Continental Indus. Grp., Inc. v. Equate Petrochemical
Co., 568 F. App’x 768, 770 (2d Cir. 2014) (quoting Best Van
Lines, Inc. v. Walker, 490 F.3d 239, 246 (2d Cir. 2007)).
With respect to the first factor, the Government has not
alleged, nor proffered evidence, that either Deutsche Bank or
the Ex-Im Bank is a “New York corporation.”

According to the

complaint, “Deutsche Bank is a German financial institution with
a branch in New York, New York,” and the New York branch is the
11

entity that extended the loan. (Compl. ¶ 13.)

That the relevant

branch is physically located in New York does not mean that
Deutsche Bank is incorporated in New York. See Walden v. Lorcom
Techs., Inc., No. 05-CV-3600 (KAM)(RER), 2009 WL 799955, at *6
(E.D.N.Y. Mar. 24, 2009) (“For the purposes of jurisdiction, a
‘New York corporation’ is one that is incorporated in New
York.”)

Meanwhile, the complaint refers at one point to the

“Export-Import Bank of the United States,” but contains no
allegations regarding the Ex-Im Bank’s physical location.
(Compl. ¶ 1.)

Accordingly, the Government has not shown that

Besneli, through his alleged agents, engaged in “an on-going
contractual relationship with a New York corporation” and the
first factor weighs against finding that he transacted business
in New York.
The Government also fails to show that any negotiation of
relevant agreements took place in New York, or that Besneli or
his agents visited New York in connection with the loan or
guarantee for the Urla Project.

Windus, who allegedly prepared

the applications for the loan and guarantee, resides in
Washington, D.C., and is not alleged to have traveled to New
York. (Compl. ¶¶ 14, 30.)

Neither did Orer, “who worked for

Besneli in Turkey” and allegedly provided false information to
induce Deutsche Bank’s disbursement of millions of dollars in
loan funds. (Id. ¶¶ 66-67; see also Gov. Mem. of L. in Opp’n at
12

5.)

The manner in which Besneli’s alleged agents communicated

with Deutsche Bank and the Ex-Im Bank—i.e., via phone,
electronic means, or mail—regarding the loan and loan guarantee
simply is not described in the complaint.

Moreover, the

Government does not claim that Besneli ever visited New York and
Besneli asserts that he did not.

Accordingly, the second factor

also weighs against finding that Besneli transacted business in
New York.
The Government fares no better with respect to the third
and fourth factors.

The complaint contains no allegations

concerning a choice-of-law provision in any document related to
the loan or guarantee for the Urla Project. See Sunward Elecs.,
362 F.3d at 23 (“A choice of law clause is a significant factor
in a personal jurisdiction analysis because the parties, by so
choosing, invoke the benefits and protections of New York
law.”).

Nor does the complaint clearly allege that Besneli (or

the parties to whom he was allegedly connected) was required to
send notices of any kind into New York or was subject to
supervision in New York.
In fact, the complaint is devoid of specific allegations
characterizing negotiations and loan terms that other courts
have emphasized in analyzing whether a defendant has transacted
business under § 302(a)(1). See, e.g., Letom Mgmt. Inc. v.
Centaur Gaming, LLC, 17 Civ. 3793 (PAE), 2017 WL 4877426, at *613

8 (S.D.N.Y. Oct. 27, 2017) (non-domiciliary defendant did not
transact business in New York where, among other things, initial
meeting took place outside New York, further negotiations
occurred exclusively via email and telephone, and the parties
chose Indiana, not New York, law); N.Y. Islanders Hockey Club,
LLP v. Comerica Bank-Texas, 71 F. Supp. 2d 108, 114 (E.D.N.Y.
1999) (non-domiciliary defendant transacted business in New York
where credit agreement was governed by New York law and
obligated defendant “to provide documents and notices to its colenders, including other New York banks,” and defendant made
“several telephone calls into New York . . . concerning the
funding of the purchase”); Catalyst Energy Dev. Corp. v. Iron
Mountain Mines, Inc., 630 F. Supp. 1314, 1317 (S.D.N.Y. 1986)
(non-domiciliary defendant transacted business in New York where
parties executed promissory note that was “made payable in New
York” and “was to be governed and construed in accordance with
New York law,” and “defendant directed telephone and written
communications to New York in connection with the making of the
note”).
The Government relies on several other cases that contain
important distinctions from the instant matter.

For example, in

Bluestone Capital Partners, the plaintiff was a New York
corporation and the non-domiciliary defendant had “conducted,
accepted, and paid for twenty-two transactions in ten different
14

securities” through a securities account in New York. 1999 WL
322658, at *1-4.

As noted above, in N.Y. Islanders Hockey Club,

the plaintiff was a New York limited partnership, and the
relevant credit agreement was governed by New York law and
obligated the non-domiliciary defendant “to provide documents
and notices to its co-lenders, including other New York banks.”
71 F. Supp. 2d at 114.

The quality of the defendants’ New York

contacts in these cases presents a more adequate basis for
exercising jurisdiction under § 302(a)(1) than what the
Government has alleged here. See Letom Mgmt. Inc., 2017 WL
4877426, at *5 (“The Court’s primary consideration is ‘[t]he
quality of the defendants’ New York contacts.’” (quoting
Fischbarg, 880 N.E.2d at 26)).
The Government also asserts that the Court may exercise
jurisdiction over Besneli on a conspiracy-based theory.

“It is

settled that co-conspirators may be considered ‘agents’ for
establishing personal jurisdiction under Section 302(a).” Sea
Trade Maritime Corp. v. Coutsodontis, No. 09 Civ 488(BSJ)(HBP),
2012 WL 3594288, at *7 (S.D.N.Y. Aug. 16, 2012).

However, in

cases where courts have considered conspiracy-based jurisdiction
over a non-domiciliary defendant, jurisdiction over the alleged
co-conspirator has usually been premised on § 302(a)(2), which
requires the commission of a tortious act within the state of
New York. See, e.g., Related Companies, L.P. v. Ruthling, 17-CV15

4175, 2017 WL 6507759, at *12-14 (S.D.N.Y. Dec. 18, 2017)
(analyzing conspiracy-based theory of jurisdiction over nondomiciliary defendant under § 302(a)(2)); Emerald Asset
Advisors, LLC v. Schaffer, 895 F. Supp. 2d 418, 430-34 (E.D.N.Y.
2012) (exercising jurisdiction over non-domiciliary defendant
under § 302(a)(2) where plaintiff adequately alleged conspiracy
involving separate defendant who committed tortious acts in New
York); Levisohn, Lerner, Berger & Langsam v. Med. Taping Sys.,
Inc., 10 F. Supp. 2d 334, 341-42 (S.D.N.Y. 1998) (finding
conspiracy-based theory of jurisdiction under § 302(a)(1)
“inapplicable” and stating that “conspiracy-based jurisdiction
is more properly based on § 302(a)(2)”).
The Government does not contend that § 302(a)(2) is
applicable here, however, and its brief refers to only one
instance in which a court relying on § 302(a)(1) exercised
conspiracy—based jurisdiction over a non-domiciliary defendant.
Significantly, in Foremost Guaranty Corp. v. Public Equities
Corp., the court began by analyzing whether a non-domiciliary
co-conspirator had transacted business in New York. No. 86 CIV.
6421 (CSH), 1988 WL 125667, at *3 & n.6 (S.D.N.Y. Nov. 10,
1988).

Based on the co-conspirator’s appearance in New York to

meet with officials of a New York corporation and the coconspirator’s mailing of several packages to New York in
connection with a transaction to purchase a mortgage, the court
16

concluded that the co-conspirator had transacted business in New
York and, thus, jurisdiction could be had under § 302(a)(1). Id.
The court proceeded to find that exercising conspiracy-based
jurisdiction over other non-domiciliary defendants was
appropriate. Id. at *3-4.
Here, to be sure, the Government alleges that Besneli
participated in a conspiracy, (see Gov. Mem. of L. in Opp’n at
9-10), but its jurisdictional allegations with respect to his
co-conspirator (i.e., SABA) are less persuasive than the
allegations in Foremost.

Moreover, the Government’s conspiracy-

based theory of jurisdiction suffers from the same weaknesses as
its agency-based theory premised on the actions of Windus and
Orer.

That is, the complaint does not contain adequate

jurisdictional allegations regarding:

(1) the status of

Deutsche Bank or the Ex-Im Bank, respectively, as a New York
corporation; (2) where the loan or guarantee was negotiated or
executed; (3) the existence of a choice of law provision in any
relevant agreement; or (4) any obligation attributable to
Besneli to send notices into New York or be subject to
supervision in New York. See Sunward Elecs., 362 F.3d at 22
(listing factors to be considered under § 302(a)(1)).
Accordingly, the Court finds that exercising jurisdiction over
Besneli on a conspiracy-based theory would not be appropriate.

17

In sum, considering the totality of the circumstances, the
Government has not made a prima f acie showing of personal
jurisdiction over Besneli pursuant to

§

302 (a) (1).

Conclusion

For the reasons above, Besneli's motion to dismiss the
complaint for lack of personal jurisdiction is GRANTED.

In

light of the Court's conclusion, it is not necessary to address
whether a jurisdictional finding in this matter would satisfy
due process or Besneli's arguments to dismiss this action for
failure to state a claim upon which relief can be granted.
If the Government wishes to amend the complaint, it shall
move this Court to do so no later than 30 days from the date of
this Opinion.

Otherwise the Court will enter an order closing

the case.
SO ORDERED.

Dated:

New York, New York
January/
2018

h ,

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OhnF.Keenan

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United States District Judge

18