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Atsushi Mori, et al v. Mamoru Saito

May 9, 2011

ATSUSHI MORI, ET AL., PLAINTIFFS,
v.
MAMORU SAITO, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Gabriel W. Gorenstein, United States Magistrate Judge

OPINION AND ORDER

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

ATSUSHI MORI, et al., Plaintiffs, v. MAMORU SAITO, et al., Defendants.

10 Civ. 6465 (BSJ) (GWG)

OPINION AND ORDER

GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE

A number of plaintiffs have brought this action seeking damages relating to the loss of approximately $11.4 million in an alleged Ponzi scheme. Plaintiffs are represented by Florence Rostami of Florence Rostami Law, LLC, New York, New York. Certain defendants -- Takahito Sakagami; Amiworld, Inc.; EBOA, Ltd.; JASB of New York Corp.; ODIN Energy NY Corp.; and ODIN Petroleum Corp. (collectively, the "defendants") -- now move for disqualification of Rostami and her firm on the ground that Rostami violated New York's Rules of Professional Conduct when she listened in on a late-night telephone conversation between Rieko Sakuramoto -- a non-party who is related to two of the plaintiffs -- and an individual whom all parties now agree was defendant Takahito Sakagami.*fn1 For the reasons stated below, the motion to disqualify is denied.

I. FACTS

A. The Nature of the Underlying Action

We recount the allegations of the complaint for the purpose of identifying the subject of Sakagami's representation by his counsel. We cite to the original complaint, and not to the amended complaint, because it was the governing pleading at the time of the incident.

The complaint was filed on August 30, 2010, on behalf of a number of plaintiffs alleging that defendants Takahito Sakagami, Mamoru Saito, and Tetsuya Hashikura, "created and maintained a Ponzi scheme, preying upon mostly Japanese residents of the U.S. with minimal investment experience to invest in a purported crude oil trading and refinery operation." Complaint, filed Aug. 30, 2010 (Docket # 1) ("Compl.") at 1 ¶ 1; accord id. at 7 ¶ 20. The defendants offered investors, including plaintiffs, a "return of 35% to 50% on one year term investments with a guaranteed principal." Id. at 1-2 ¶ 1.

In order to carry out this scheme, Sakagami and Saito organized numerous companies, offshore banks, and other financial institutions, which were wholly owned by them or other defendants. Id. at 2 ¶ 2. Plaintiffs were solicited to invest in or purchase shares of these entities. Id. Pursuant to an investment agreement with defendants, plaintiffs were required to open an account with Bank of the Atlantic, Ltd. ("BOA"). Id. Plaintiffs were informed that the returns on their investments would be deposited into their BOA account. Id.

At first, investors were able to transfer money from their BOA accounts into their personal bank accounts. Id. at 2-3 ¶ 4. But defendants eventually stopped paying plaintiffs any returns on their investments. Id. at 3 ¶ 5. "Although their bank accounts at BOA showed monthly deposits of purported returns, after a few months the investors could not withdraw any of the funds." Id. ...


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