United States District Court, S.D. New York
PLAINTIFF UNTED STATES OF AMERICA CRISTINE IRVIN PHILLIPS LI
DEFENDANT HASAN BESNELI PRO SE
OPINION & ORDER
F. KEENAN, UNITED STATES DISTRICT JUDGE
the Court is Hasan Besneli's motion to dismiss the
Government's complaint, which seeks a civil penalty
against Besneli under 12 U.S.C. § 1833a for alleged
violations of 18 U.S.C. §§ 1341 and 1343.
Construing Besneli's pro se motion to raise the strongest
arguments that it suggests, the Court has determined that the
grounds for Besneli's motion are lack of personal
jurisdiction under Federal Rule of Civil Procedure 12(b)(2)
and failure to state a claim upon which relief can be granted
under Federal Rule of Civil Procedure 12(b)(6). For the
reasons below, the Court concludes that the Government's
complaint does not establish a prima facie showing of
personal jurisdiction and, accordingly, grants Besneli's
motion to dismiss.
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.)
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.)
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
Export- 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
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.)
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.) Two such conditions
are relevant here. 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 total
cost of all U.S.-made goods purchased.” (Id.
¶ 20 (citing 12 U.S.C. § 635(a)(2).)
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.
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
entity,  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.
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 ...