United States v. Besneli
1:14-cv-07339
S.D.N.Y.Jan 16, 2018Background
- Plaintiff (United States) sued Hasan Besneli (Turkish citizen, resident of Istanbul) under 12 U.S.C. § 1833a alleging fraud in obtaining an Ex-Im Bank–guaranteed loan for a Turkish nonprofit (Darussafaka) tied to a $38M+ loan arranged by Deutsche Bank’s New York branch.
- Besneli was an agent/vice‑president of SABA, Inc. (Tennessee exporter); allegations include markups of U.S. goods, diversion of loan proceeds (donations and down‑payment substitutions), and false progress reports that induced fund disbursements.
- SABA settled with the Government and was dismissed; service on Besneli was effected by email and publication after he could not be located in the U.S.; Besneli replied pro se and moved to dismiss.
- The Court construed Besneli’s motion as raising lack of personal jurisdiction (Fed. R. Civ. P. 12(b)(2)) and failure to state a claim (12(b)(6)), but considered only jurisdictional issues.
- The Government relied on N.Y. C.P.L.R. § 302(a)(1) (transacting business in New York, including through agents) and a conspiracy theory to establish jurisdiction, pointing to activities by alleged agents Jennifer Windus (prepared loan/guarantee applications) and Unver Orer (signed progress reports).
- The Court found the complaint lacked specific factual allegations showing purposeful, New York‑directed business contacts (no New York corporation relationship, no in‑state negotiations or visits, no choice‑of‑law or supervision ties) and denied the Government’s prima facie showing of personal jurisdiction, and thus granted dismissal without reaching merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether New York courts have personal jurisdiction under N.Y. C.P.L.R. § 302(a)(1) | Besneli transacted business in NY through agents and the loan was issued by Deutsche Bank’s NY branch | Besneli had no purposeful New York contacts; negotiations and work occurred outside NY | Dismissal: Government failed to make a prima facie showing of jurisdiction under § 302(a)(1) |
| Whether alleged agents (Windus, Orer) established agency contacts to attribute NY acts to Besneli | Windus and Orer acted for Besneli and transacted with NY entities on his behalf | Complaint lacks allegations that agents acted in NY for Besneli’s benefit with his control/consent or made purposeful NY contacts | Held: Agency allegations insufficient to establish § 302(a)(1) jurisdiction |
| Whether conspiracy‑based jurisdiction supports NY long‑arm jurisdiction | Co‑conspirator SABA’s conduct and alleged scheme produced NY contacts that can be imputed to Besneli | Conspiracy theory fails because complaint lacks allegations of tortious acts in NY or other requisite NY contacts; Gov’t did not invoke § 302(a)(2) | Held: Conspiracy theory inadequate to establish jurisdiction under § 302(a)(1) in this case |
| Whether the Court should reach due process or merits (failure to state a claim) | N/A — Government argued merits elsewhere | Besneli argued merits defenses; also contested jurisdiction | Held: Court did not reach due process or 12(b)(6) merits because dismissal for lack of personal jurisdiction was granted; Government may move to amend within 30 days |
Key Cases Cited
- Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161 (2d Cir.) (prima facie showing required to defeat a Rule 12(b)(2) motion)
- Chloé v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158 (2d Cir.) (one transaction in New York can support jurisdiction if purposeful)
- Sunward Elecs., Inc. v. McDonald, 362 F.3d 17 (2d Cir.) (factors for determining whether out‑of‑state defendant transacted business in New York)
- CutCo Indus., Inc. v. Naughton, 806 F.2d 361 (2d Cir.) (agency analysis under § 302 focuses on realities of the relationship)
- Agency Rent A Car Sys., Inc. v. Grand Rent A Car Corp., 98 F.3d 25 (2d Cir.) (considerations for contractual contacts and jurisdiction under § 302)