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Johannes Baumgartner Wirtschafts und Vermogensberatung GmbH v. Salzman

September 17, 2010


The opinion of the court was delivered by: Joanna Seybert, U.S.D.J.


SEYBERT, District Judge

On June 27, 2008, Plaintiffs Johannes Baumgartner Wirtschafts-und Vermögensberatung GmbH ("Baumgartner") and Holger Knut Theiler ("Holger") (collectively, "Plaintiffs") commenced this action against numerous Defendants, alleging a multi-million dollar RICO and securities fraud scheme. Defendants Aykut Hasan Bolukbasi, pro se, Murat Ozkan, pro se, Hakan Metin, pro se, have moved to dismiss for lack of personal jurisdiction.

For the following reasons, these motions (Docket Nos. 103, 104, 110) are DENIED.


I. Standard Of Review On A Motion To Dismiss For Lack of Personal Jurisdiction

On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that the court has jurisdiction over the defendant. Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996). When, as is the case here, the plaintiff has not undertaken jurisdictional discovery, and the Court "[has chosen] not to conduct a full-blown evidentiary hearing on the motion," the plaintiff need only "make a prima facie showing that jurisdiction exists." Penguin Group (USA) Inc. v. American Buddha, 609 F.3d 30, 34-35 (2d Cir. 2010) (jurisdictional discovery, internal citations and quotations omitted); Grand River Enterprises Six Nations, Ltd. v. Pryor, 425 F.3d 158, 165 (2d Cir. 2005) (evidentiary hearing, internal citations and quotations omitted). Such a showing "entails making legally sufficient allegations of jurisdiction, including an averment of facts that, if credited[,] would suffice to establish jurisdiction over the defendant." Penguin Group (USA) Inc., 609 F.3d at 35 (internal citations and quotations omitted). In deciding whether the plaintiff has met its burden, the Court must construe "pleadings and affidavits in the light most favorable to plaintiffs, resolving all doubts in their favor." Porina v. Marward Shipping Co., Ltd., 521 F.3d 122, 126 (2d Cir. 2008). Additionally, the Court must "draw all reasonable inferences in the plaintiff's favor." Garg v. Winterthur, 525 F. Supp. 2d 315, 318 (E.D.N.Y. 2007).

Finally, in deciding personal jurisdiction questions, district courts must conduct a two part analysis, looking first to the state's long arm statute and then analyzing whether jurisdiction comports with federal due process. Mario Valente Collezioni, Ltd. v. Confezioni Semeraro Paolo, S.R.L., 264 F.3d 32, 37 (2d Cir. 2001). The two part analysis is sequential; if the district court finds no basis for long arm jurisdiction, it need not engage in a federal due process analysis. Bensusan Rest. Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997).

A. Personal Jurisdiction As To Messrs. Bolukbasi, Ozkan, and Metin

Plaintiffs' Second Amended Complaint names Messrs. Bolukbasi, Ozkan, and Metin as Defendants. Although the Second Complaint's 300 paragraphs plead an "advanced fee" securities fraud in significant detail, its factual allegations against Messrs. Bolukbasi, Ozkan, and Metin are relatively sparse. These factual allegations, in their entirety, are as follows:

(1) Messrs. Bolukbasi, Ozkan, and Metin are "Turkish organized crime figures," (SAC ¶ 71); (2) Mr. Metin was "actively involved in promoting similar schemes in the U.S. and elsewhere" (SAC ¶ 71); (3) Messrs. Bolukbasi and Ozkan were unjustly enriched and engaged in constructive fraud when former Defendant Stanley P. Salzman converted almost $1.6 million of Plaintiffs' money and disbursed it to them, without Messrs. Bolukbasi or Ozkan providing any valuable consideration or performing any useful services (SAC ¶¶ 179-186); (4) Messrs. Bolukbasi, Ozkan, and Metin participated in forging some of the documents that induced Plaintiffs to invest in the scheme (SAC ¶ 202); and (5) Mr. Bolukbasi committed unspecified wire frauds (SAC ¶ 271).

In response to Plaintiffs' Second Amended Complaint, Messrs. Bolukbasi, Ozkan and Metin submitted substantively identical letters. (Docket Nos. 103, 104, 110). In these letters, Messrs. Bolukbasi, Ozkan and Metin set forth that: (1) they are Turkish citizens who reside in Europe; (2) they neither conduct business in the United States nor own property in the United States; and (3) Plaintiffs have commenced related proceedings against them in Turkey. Each of these letters asked the Court to dismiss this action against them.

By Electronic Orders dated March 1 and 10, 2010, the Court construed these letters as motions to dismiss for lack of personal jurisdiction, and ordered Plaintiffs to respond accordingly. The Court did so because: (1) the pleadings of pro se litigants, such as Messrs. Bolukbasi, Ozkan, and Metin, must be construed liberally; (2) this concern for pro se litigants is, if anything, magnified when the pro se litigants are foreign nationals who may not be familiar with the American legal system; and (3) when contested, it is Plaintiffs' affirmative burden to establish personal jurisdiction. See Sealed Plaintiff v. Sealed Defendant, 537 F.3d 185, 192 (2d Cir. 2008) (pro se litigants pleadings must be construed liberally); Metro. Life Ins. Co., 84 F.3d at 566 (plaintiffs bear burden of establishing personal jurisdiction).

In response to Messrs. Bolukbasi's, Ozkan's, and Metin's motions, Plaintiffs submitted a detailed memorandum of law and numerous exhibits evidencing these Defendants' role in the alleged scheme. According to this evidence: (1) Mr. Bolukbasi wrote Mr. Salzman and, in connection with Mr. Salzman's "undertaking to me dated March 27, 2008," asked Mr. Salzman to wire $800,000 to his bank account, and another $800,000 to a bank account owned by Mr. Ozkan, after Mr. Salzman received the "original documentations" (Docket No. 130, Ex. G); (2) Mr. Salzman subsequently did so, using Plaintiffs' escrowed money to complete the transaction (Docket No. 130, Exs. H and I); (3) Mr. Bolukbasi subsequently wired more than $250,000 of this money to Mr. Metin (Docket No. 130, Exs. J); (4) these "original documentations" were forged bank records used to induce Plaintiffs' investment in the scheme, and were received by Mr. Salzman from an e-mail address associated with someone named "Hakan"; and (5) in a pending Turkish criminal proceeding, co-defendant Huseyn Coban testified that Messrs. Bolukbasi and Metin conspired to forge bank guarantees, and then deliver these forgeries to Mr. Salzman in order to induce Plaintiffs' to invest in the scheme (Docket 130, Ex. M). Mr. Coban further testified that Mr. Ozkan "helped organize those documents," and added his "English language skills," but that, when the fraudulent nature of the guarantees was revealed, he contacted Mr. Salzman and returned his portion of the proceeds. (Docket 130, Ex. M). Based on this evidence, Plaintiffs argue that they have established personal jurisdiction under the "effects doctrine" ...

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