The opinion of the court was delivered by: Gershon, United States District Judge
In this action, plaintiff Capital Distribution Services, Ltd. ("CDS") seeks to recover funds paid to defendant Ducor Express Airlines, Inc. ("Ducor") for the provision of cargo flights that Ducor failed to provide. Ducor has confessed judgment on CDS's claim of breach of contract. CDS now moves for partial summary judgment against defendants Mabutu M. Kamara ("Mabutu"), Khady Kamara ("Khady"), Abou Kamara ("Abou"), and Simon Barry ("Barry") on its claims of fraudulent conveyance, conversion, and unjust enrichment. CDS also seeks a preliminary injunction or, in the alternative, an order of attachment pertaining to certain real properties in Las Vegas, Nevada, owned by Abou and defendant Vivian Kamara ("Vivian"). For the reasons set forth below, CDS's motion for partial summary judgment is granted in part and denied in part, and Abou is enjoined from taking any action to transfer, dispose of, encumber, or otherwise reduce or jeopardize his interest in the properties at issue during the pendency of this action.
Except where otherwise noted, the following facts are not in dispute:
The Agreement between CDS and Ducor CDS is a shipping company organized under the laws of Hong Kong. Ducor is a corporation organized under the laws of New York. On September 9, 2005, CDS entered into an agreement (the "Agreement") with Ducor for the transportation of certain cargo from Hong Kong to Los Angeles. The Agreement was embodied in a one page memorandum on Ducor letterhead addressed to the managing director of CDS and dated September 9, 2004; the reference line states: "Cargo Transport Contract Agreement." Pursuant to the terms of the Agreement, Ducor was to provide for the transportation of CDS's cargo by air, in four separate shipments on specified dates in September and October 2004, at a cost of $450,000 per flight. CDS wired $1.8 million, in several installments, into a business checking account (the "Ducor Checking Account") held by Ducor at Washington Mutual Bank. Ducor provided the first two flights pursuant to the Agreement via an air carrier called Evergreen International Airlines, Inc. Ducor failed to provide the third and fourth flights, however. By letter dated November 30, 2004, CDS's counsel demanded a refund of $900,000 from Ducor, the amount paid for the third and fourth flights. To date, Ducor has refunded $33,065.55 to CDS.
Transfers of Money by Ducor
At the time the Agreement was executed, Ducor held only one bank account, the Ducor Checking Account. On October 25, 2004, Mabutu, who is Ducor's principal, opened a second account (the "Ducor Savings Account") for Ducor, a platinum business savings account at Washington Mutual Bank. Mabutu then transferred $701,000 from the Ducor Checking Account into the Ducor Savings Account. Between November 30, 2004 and December 19, 2004, Mabutu made wire transfers from the Ducor Savings Account to Abou, who is Mabutu's brother and adopted son, totaling $91,000, and to Barry, an entrepreneur who brokered the deal between CDS and Ducor, totaling $74,295.
At approximately 1:58 p.m. on December 20, 2004, Ducor and Mabutu were served by CDS's process server with the summons and complaint in this action, together with an order to show cause why the court should not attach Ducor's bank accounts. At 3:30 p.m. on that day, Mabutu transferred $95,000 from the Ducor Savings Account to Abou and $300,000 from the Ducor Savings Account to BHS New York Corp. ("BHS"). The latter entity is a subsidiary of Bank Habitat de Senegal, engaged in the business of transmitting money between New York and Senegal. Following the transfers, the balance in the Ducor Savings Account was less than $1,000 and the Ducor Checking Account was overdrawn. Ducor has not acknowledged having any other assets besides the two bank accounts.
A. Funds Transferred to BHS
CDS contends that, of the $300,000 that was transferred to BHS, $50,000 was subsequently transmitted to an entity called Albay Travel in Dakar, Senegal, $56,500 was transmitted to Abou, $150,000 was transmitted to an account held by Khady, who is Mabutu's wife, at the Bank Habitat de Senegal, and $43,500 was returned to Mabutu in cash. In support, CDS has submitted the deposition testimony of Abrahima Diene, general manager of BHS, a letter dated February 11, 2005 from Mabutu to Diene, and certain bank records. Diene testified that BHS received a cashier's check from Mabutu in the amount of $300,000 by Federal Express, together with a cover letter dated December 20, 2004, photocopies of Mabutu's driver's license, passport, and social security card, and instructions about where to transmit the money. Subsequently, Mabutu went to BHS's offices in person to provide further instructions. Mabutu sought to have $56,500 transmitted to a bank account in California. Diene explained to him that BHS does not execute domestic wire transfers; the company only transmits money to Senegal. He advised Mabutu to bring the funds to Mabutu's bank, which could effect the domestic transfer. At Mabutu's request, BHS returned $56,500 to him, in cash, on February 3, 2005. Diene further testified that, pursuant to Mabutu's instructions, $50,000 was transmitted to a bank account belonging to Albay Travel Service on January 27, 2005, $81,200 was transmitted to a bank account belonging to Khady on February 17, 2005, and $68,800 was transmitted to the same account belonging to Khady on February 24, 2005. CDS submitted computer-generated receipts of these transactions, which were produced by BHS in response to a document request from CDS. Diene testified that the remaining $43,500 was refunded to Mabutu by check. CDS submitted a BHS receipt indicating that $43,500 was remitted to Mabutu on February 15, 2005.
CDS has also submitted a letter, dated February 11, 2005, from Mabutu to Diene, which was produced by BHS. The body of the letter states:
I am very disappointed by the action of your bank. We discussed and agreed over a week ago that your company will calculate and fax me a statement on our account. Up until now, we have yet to receive it. The balance of our account was $300,000.00 Original balance, cashier check sent -50,000.00 Transferred to Albay Travel in Dakar $250,000.00 Sub-Total before cash received.
-56,500.00 Cash received on 01 February $193,500.00 Balance now with BHS -150,000.00 to be deposited into account in Dakar $43,500.00 to be mailed to M. Mabutu Kamara Please mail me a check in the amount of $43,500.00 as soon as possible for me to handle the rest of my work. If you wish, I will send my messenger to pick up the check. Please do not delay this process; it will definitely mess up my business.
In addition, CDS has submitted a statement from Abou's account at a San Diego branch of Washington Mutual Bank. It shows that a wire transfer deposit in the amount of $56,500 was made on February 3, 2005.
Defendants dispute CDS's account of how the $300,000 was distributed by BHS. During his deposition, Mabutu testified that he instructed BHS to transmit the entire $300,000 to Air Senegal. He admitted to receiving $56,500 in cash from BHS, but contended that the money was a commission from Air Senegal. Mabutu Dep. at 421. He further testified that he deposited the $56,500 into one of Ducor's bank accounts and that "it stays there." Mabutu Dep. at 414. (Abou, however, acknowledges receiving $56,500 from Ducor, via a wire transfer by Mabutu, on February 3, 2005. Abou Dep. at 57; Abou Aff. at ¶ 5.) Mabutu specifically denied that any of the $300,000 was transmitted to Khady's bank account:
Q: Did you instruct BHS to deposit this $300,000 check into Khady Kamara's account?
Q: What did you instruct BHS to do with this check?
A: To send it to Air Senegal.
Q: And did Khady Kamara authorize you to use her account?
Q: She was aware that her account was going to be receiving $300,000?
A: She never got $300,000. It never went to her account.
Mabutu Dep. at 383, 397-98.
Later, in an affidavit, Mabutu provided a different explanation of how the $300,000 was disbursed. He stated: "There was money sent to my wife in Africa for business reasons. In fact, on December 20, 2004, a $300,000 bank check was obtained and sent to Faso Airways for the procurement of flights. These funds were initially sent to Khady Kamara's account in order for her to oversee the transaction of funds going to Faso Airways," which he identified as an African air charter company. Mabutu Aff. at ¶ 8.
B. Funds Transferred to Abou
CDS contends that $242,500 was transferred from Ducor to Abou, comprised of $41,000 transferred on November 30, 2004, $50,000 transferred on December 6, 2004, $95,000 transferred on December 20, 2004, and $56,500 transferred on February 3, 2005 after being returned by BHS. In their response to CDS's Local Rule 56.1 Statement, defendants admit that $242,500 was transferred from Ducor to Abou. They contend, however, that Ducor was obligated to make those payments to Abou under an investment agreement. Mabutu testified about the investment agreement at his deposition and later produced it to CDS. Dated November 15, 1997, the agreement is between Abou and an entity called Ducor Express Travel, Ltd.*fn1 It provides:
Ducor Express Travel, Ltd. and Mr. Abou M. Kamara have entered into an investment agreement as indicated below.
Mr. Abou M. Kamara has agreed to invest $150,000.00 (One Hundred & Fifty Thousand Dollars) for two years effective December 01, 1997 and ending December 01, 1999. Your investment will yield 30% interest every six months beginning December 01, 1997 which equals $45,000.00 to be deposited into your checking account at the end of every six months.
Mabutu testified that he did not know where Abou obtained the money that he invested in Ducor Express Travel, ...