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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ) ) Plaintiff, ) ) v. ) ) BRETT J. CORMICK and ELAN SUISSE ) INTERNATIONAL HOLDINGS (USA) ) LLC, ) ) Defendants. ) ____________________________________) ELAN SUISSE, LTD., ) ) Plaintiff, ) ) v. ) ) ROBERT D. CHRIST, ) ) Defendant. ) ____________________________________) ROBERT D. CHRIST,
C.A. No. 06-275-GMS
C.A. No. 07-60-GMS
ANSWERING MEMORANDUM OF BRETT J. CORMICK, ELAN SUISSE INTERNATIONAL HOLDINGS (USA) LLC AND ELAN SUISSE, LTD. TO ROBERT D. CHRIST'S MOTION FOR ENTRY OF DEFAULT JUDGMENT AND ATTORNEYS' FEES Brett J. Cormick and Elan Suisse International Holdings (USA) LLC (defendants in Civil Action No. 06-275-GMS) and Elan Suisse, Ltd. (plaintiff in Civil Action No. 07-60-GMS) (collectively, "Respondents") hereby respond to Robert D. Christ's Motion for Entry of Default Judgment and Attorney's Fees as follows:
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ARGUMENT Mr. Christ has requested three categories of compensation (in addition to the claim for $250,000 constituting his original investment, as to which Respondents have no dispute): (1) special damages, (2) punitive damages, and (3) attorneys' fees. As demonstrated below, these claims are inappropriate, unjustified and unsupported, and constitute overreaching on the part of Mr. Christ. I. THE CLAIM FOR SPECIAL DAMAGES IS IMPROPER AS NO SPECIAL DAMAGES WERE PLEADED, AND THE ALLEGED SPECIAL DAMAGES ARE NEITHER PROPER NOR DOCUMENTED. "A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings." Fed. R. Civ. P. 54(c). "Therefore, a default judgment must be supported by specific allegations as to the exact amount of damages asked for in the complaint." Philip Morris USA, Inc. v. Castworld Products, Inc., 219 F.R.D. 494, 499 (C.D. Cal. 2003). The only "amount" specifically identified in the Amended Complaint is Mr. Christ's investment of $250,000. It is true that the ad damnum clause requests unidentified "consequential damages." To the extent this is intended as a demand for special damages, it is insufficient. Special damages must be pleaded with specificity. Fed. R. Civ. P. 9(g). Failure to so plead precludes their recovery upon judgment. Maidmore Realty Co., Inc. v. Maidmore Realty Co., Inc., 474 F.2d 840, 843 (3d Cir.1973). This rule applies equally in the context of default judgments. See Blanchard v. Cortes-Molina, 453 F.3d 40, 45 (1st Cir. 2006).1
1
Special damages are those damages which may be the natural and consequential result of the wrong, but do not necessarily or inevitably result from the wrong. Huyler's v. Ritz-Carlton Restaurant & Hotel Co. of Atlantic City, 6. F.2d 404, 406 (D. Del. 1925). The claimed damages (other than the $250,000) did not inevitably result from the wrong, but were collateral to it. See, e.g., Duncan v. Duncan, No. CK92-4672, 1998 WL 420750, WL Op. at *2, Walls, J. (Del. Fam. Jan. 9, (continued...) 2
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As Mr. Christ did not set forth his special damages in his Amended Complaint, he is foreclosed from seeking them now.2 Additionally, as set forth below, the requested amounts are not properly compensable. 1. Travel Expenses: Mr. Christ seeks "approximately $5,000" to travel to England to
meet with Dr. Cormick and representatives of BNP Paribas.3 (Christ Aff. ¶4). The purpose of this trip was to allow Mr. Christ to see that the proposed business had serious interest by important players in the financial industry so as to give Mr. Christ some comfort before investing. (Exs. A at 64-69, C).4 Even if this was a properly compensable item, Mr. Christ has not provided any evidence to support his self-serving statement as to the actual cost of this trip. Merely giving an
"approximate" rounded figure renders the amount speculative and insufficient. See O'Keefe v. Niagara Mohawk Power Corp., 714 F.Supp. 622, 634 (N.D.N.Y. 1989). See also Duncan, WL Op. at *3 (special damages must be proven "to a reasonable degree of certainty"). As Mr. Christ has declined to provide any supporting documentation, or an exact figure, and did not plead these items in his Amended Complaint, thereby denying Dr. Cormick an opportunity to obtain discovery on the
(...continued) 1998) ("[a] claim for loss of income constitutes special damages which require proof to a reasonable degree of certainty").
2
1
Although Mr. Christ listed his proposed special damages in the pretrial order, Respondents noted an objection thereto, thereby preserving the issue.
3
BNP Paribas is a leading European bank. http://en.wikipedia.org/wiki/BNP_Paribas.
4
Mr. Christ sent an e-mail to his wife after that meeting, apparently excited about the prospects, although on deposition Mr. Christ testified that he misled his wife about his true feelings, and that the meeting (and other events preceding it) raised alarm bells in his head about the venture, which he ignored because of his feelings for Dr. Cormick. (Ex. A at 69-72). 3
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issue and develop rebuttal evidence, he should not be allowed to claim this as damages at this late date. Mr. Christ also appears to claim "approximately $3,000" in travel expenses coming to Delaware for his deposition. Apart from the fact that this claim is undocumented and merely an estimate, Mr. Christ is not entitled to recover costs incurred in coming to Delaware (the jurisdiction where he filed suit) for his deposition. Matthews v. Wilson, 123 F.R.D. 522, 523 (E.D. Pa. 1989). 2. Communication Expenses: Mr. Christ "estimate[s]" that he "incurred $4,000 in
communications expenses (for telephone, fax, Internet, etc.) relating to the `business' of Elan Suisse." (Christ Aff. ¶5). This conclusory statement is wholly inadequate. Where is the
documentation? What is the correct amount? Was this money used to purchase equipment? If so, where is the equipment? Is Mr. Christ making personal use of it? What percentage of use of the equipment's use was business-related? Is Mr. Christ improperly attempting to obtain recovery of his payments for home Internet service (or worse, his business Internet for which he may take a tax deduction as a business expense) by claiming it was used as part of Elan Suisse's business? Absent clear evidence of the methodology and basis for this claim, it amounts to nothing but speculation, and so Respondents are not answerable for such alleged damages. 3. Pelican Hard Case: Mr. Christ wants $225.00 for a "Pelican hard case" he purchased.
Where is the receipt? Where is the evidence that a case of this expense was necessary to ship t-shirts (after all, Mr. Christ had a duty to mitigate expense)? 4. Lost Revenues: Perhaps the most questionable of all Mr. Christ's special damages
claims is the claim for lost revenue. Mr. Christ claims that he should be compensated for time spent (i) working on the Elan Suisse project, and (ii) doing investigation for this lawsuit, because it 4
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precluded him from doing work for his business. Mr. Christ seeks compensation at his daily rate in his business times the number of days he "estimates" that he spent on this work. (Christ Aff. ¶¶6-8).5 First, Mr. Christ previously sued an Elan Suisse entity for compensation in connection with his work on the Elan Suisse website referred to in paragraph 5 of his affidavit, and agreed to a settlement. (Ex. A at 185-86). Mr. Christ did not disclose the fact of that lawsuit to the Court, provide documentation or explain why he should be compensated in this lawsuit as well. Second, Mr. Christ again "estimates" the number of days he spent, with no time records, no explanation of what work was done on those days or how they were essential to Elan Suisse or his case.6 This is rank speculation. Third, there is no evidence (much less objective evidence) that, but for his time spent on behalf of Elan Suisse and doing research for the litigation, there would have been work offered to him in his business that he had to turn away. Fourth, there is no justification offered as to why, even if these other failures of proof were overcome, Mr. Christ should be entitled to compensation at the rate he is paid in his business. There is no evidence that such rate is comparable to the rates paid to individuals doing comparable work.
5
In his affidavit, Mr. Christ swears that his daily rate is $1,475 (Christ Aff. ¶8), but in his deposition (three months ago) he swore that his daily rate was $985. (Ex. A at 185).
6
Mr. Christ's web site shows that much of his "research" was aimed not at Dr. Cormick, but at individuals previously associated with Dr. Cormick. Mr. Christ's "research" also consisted of gathering complaints and criticisms from former wives and lovers of Dr. Cormick, and others with biases or grudges, entirely unrelated to his claim, and repeating their untested accusations on his web site. This information would be neither relevant nor admissible in his lawsuit. Mr. Christ has not explained how much of the time for which he seeks compensation was spent on these pursuits or, if none, how he determined such. 5
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Finally, irrespective of the above, as a matter of law a litigant has no right to compensation for time spent in furtherance of his or her lawsuit. See Wesley v. Don Stein Buick, Inc., C.A. No. 972271-FWL, 1998 WL 709600, WL Op. at *1, Lungstrum, J. (D. Kan 1998); Steinberg v. Grasso, C.A. No. A-2508-0ST1, 2007 WL 701689, WL Op. at *7 (N.J. Super. A.D. Mar. 9, 2007), certification denied mem., 927 A.2d 1291 (N.J. 2007) ("[l]itigants generally are not entitled to recover their time lost in attending court or participating in litigation..."). Mr. Christ's claims are simply attempts to win the default judgment lottery. As they are unpleaded, unsupported and unlawful, they should be rejected. II. UNDER THE CIRCUMSTANCES, PUNITIVE DAMAGES ARE UNWARRANTED. On a default judgment, the allegations of the Amended Complaint are not accepted as true for the purpose of establishing punitive damages. Deshmukh v. Cook, 630 F.Supp. 956, 959-60 (S.D.N.Y. 1986). Thus, Mr. Christ must affirmatively prove entitlement to punitive damages. Matter of Gober, 100 F.3d 1195, 1205 (5th Cir. 1996). To obtain punitive damages for fraud or deceit, it must be gross, oppressive or aggravated or involve a breach of trust or confidence.7 Stephenson v. Capano Development, Inc., 462 A.2d 1069, 1076-77 (Del. 1983). Thus, Mr. Christ must provide evidence to show Dr. Cormick's state of mind, to the extent that Mr. Christ is claiming that Dr. Cormick acted "intentionally and
7
Mr. Christ does not claim any breach of trust or confidence, nor could he under the facts. In the four-years the two men knew each other prior to the transaction at issue, they had spent only approximately twenty-two days together, the vast majority of which was spent with Mr. Christ serving as a paid tour guide. (Ex. A at 35-37; Ex. B at 312-13). This does not rise to the level of a relationship of trust or confidence, no matter how strongly Mr. Christ may have felt toward Dr. Cormick. See, e.g., Meyer v. Cathey, 167 S.W.3d 327, 331 (Tex. 2005) (friendship and plaintiff's subjective trust does not create a fiduciary relationship). 6
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maliciously" (Christ Memorandum at 5). See Lothschuetz v. Carpenter, 898 F.2d 1200, 1205-06 (6th Cir. 1990). Mr. Christ is also obligated to establish that the amount of punitive damages is reasonable under the circumstances. Beck v. Atlantic Contracting Co., Inc., 157 F.R.D. 61, 65 (D. Kan. 1994). Mr. Christ has done none of this. Mr. Christ claims that he is entitled to punitive damages because Dr. Cormick "deliberately and continually threw up roadblocks in legal proceedings in two countries in an effort to hinder Mr. Christ's legal efforts at reclaiming Mr. Cormick's ill-gotten gains." In other words, Mr. Christ seeks punitive damages because Dr. Cormick defended himself. There is no basis for awarding punitive damages for defending oneself in litigation, and Mr. Christ has not offered any precedential support for his argument. Moreover, there is no basis to suggest that Dr. Cormick did anything improper in defending himself.8 Mr. Christ claims that punitive damages are warranted because Mr. Christ avoided his deposition. However, this Court has already sanctioned Dr. Cormick for that by granting a default judgment. Although Mr. Christ characterizes Dr. Cormick's failure to appear for a deposition as an "act of defiance" (Christ Mem. at 5), as counsel stated at the hearing on default, Dr. Cormick decided for various reasons (primarily economic) to give up the fight and concede to a default judgment, with the deposition being a collateral issue. As such, this does not justify punitive damages.
8
As shown at Exhibit F at F-22-27, Mr. Christ, on his website, has accused Dr. Cormick's counsel of unethical conduct in connection with his representation of Dr. Cormick in violation of the Delaware Rules of Professional Conduct (which do not apply in federal proceedings, see D. Del. L.R. 83.6(d)). However, Mr. Christ has not identified any conduct which any court or disciplinary body would recognize as an ethical violation. Mr. Christ's comments are the result of blind rage rather than reasoned analysis. 7
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Finally, in determining whether to award punitive damages and the amount, Respondents are entitled to submit evidence in mitigation of punitive damages. Germanio v. Goodyear Tire & Rubber Co., 732 F.Supp. 1297, 1304 (D.N.J. 1990). In mitigation, Respondents ask the Court to consider two things: (i) Mr. Christ's own culpability, and (ii) the punishment Mr. Christ's website has inflicted and will continue to inflict on Dr. Cormick. a. Mr. Christ's Own Culpability.
The Court should understand that Mr. Christ is not an innocent babe in the woods fleeced by an avaricious predator, but a commercially sophisticated party. Mr. Christ is a college graduate who earned a CPA license and worked for Coopers & Lybrand, then one of the top accounting firms with clients with net worths in the hundreds of millions and in the billions. Thereafter he was employed by companies of significant size to do accounting work. Mr. Christ was familiar with the concept of due diligence. (Ex. A at 4-20). Indeed, on his website he identifies himself as an "experienced forensic accountant." (Ex. F at F-11). Thus, Mr. Christ had the full knowledge and skills to protect himself, which he deliberately decided not to use. Part of that knowledge came from experience. This was not Mr. Christ's first encounter of this kind. He had previously accepted an offer to go to Barbados from a man he had never met to work on a "get rich quick" scheme involving currency exchange. When Mr. Christ got there he discovered that he would not be paid as promised, but still decided to stick it out in hope. He ended up not being paid, not being able to pay his hotel bill, having the hotel take his passport until he could pay not only his own bill but the bill of other participants, and only getting his passport back after being bailed out by a friend. Curiously, unlike the present case where Mr. Christ's anger with Dr. Cormick remains unabated, Mr. Christ still thought well of those who caused his predicament, 8
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and even had a friendly reunion with the ringleader some months after his return to the U.S. (Ex. A at 21-34). Although Dr. Cormick continues to maintain that Elan Suisse was a legitimate business9, for the purposes of the default judgment he must accept that he has been found to have made false statements. But in that regard, Mr. Christ testified that there were several instances where he was put on notice that things may not have been as they represented. Notwithstanding these "alarms" (one of which Mr. Christ described as "screaming"), he never investigated, although Mr. Christ testified that had it been anyone other than Dr. Cormick, he would have avoided the project entirely. (Ex. B at 300-09, 398-99, 410-11). Thus, in determining whether Mr. Christ should be the beneficiary of punitive damages, the Court should consider his own conduct. b. Mr. Christ's website.
As the function of punitive damages is punishment, it is appropriate for the Court to consider other punishments meted out against Dr. Cormick. See Wilhelm v. Ryan, 902 A.2d 745, 749-52 (Del. 2006) (evidence of criminal punishment admissible in mitigation of punitive damages). In this case, Mr. Christ has been punishing, and continues to punish, Dr. Cormick via his website. On that website, Mr. Christ routinely excoriates Dr. Cormick (and anyone associated with him, including counsel), repeatedly referring to Dr. Cormick (directly or by innuendo) as a scam artist, a grifter, a cheat, a pathological liar, a criminal, a crook, a thief, one who has been "in and out
9
Indeed, witnesses Richard Crook and Apostolos Zographos testified on deposition how investors in Zimbabwe had benefitted from Elan Suisse's pilot program. (Ex. D at 14-18; Ex. E at 5-6). 9
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of jail for years," a "dead beat dad," a "dirt bag," a pedophile, etc. Selections from Mr. Christ's website are gathered at Exhibit F. Mr. Christ also seeks out ex-wives and lovers, and others with biases or grudges, and publishes on his web site whatever bad things they tell him, with no regard for whether what he is repeating is false, incomplete or misleading. Indeed, Mr. Christ testified that he tends to accept any malignant interpretation of information presented to him over any benign interpretation, and that he feels no obligation to ensure the accuracy of what he posts as he is merely repeating what he was told by others. (A-133, 141-42, 144-47, 194-98, 228-29, 251-55). Because of the default judgment, Dr. Cormick has lost his opportunity to obtain compensation for the defamatory aspects of the website. He has also lost the opportunity to have the website taken down. Now Mr. Christ can post vitriolic statements with impunity. Whenever any potential employer, investor, friend, or girlfriend types "Brett Cormick" into Google, Mr. Christ's website will be the first link that comes up. (Ex. G). This will follow Dr. Cormick wherever he goes for at least as long as the website is up.10 Indeed, it is ironic that Mr. Christ adamantly pursues all avenues to recover his investment, while at the same time taking deliberate action to prevent Dr. Cormick from ever being in a position to generate revenue to pay the default judgment. All of this is in addition to the fact that Mr. Christ had Dr. Cormick arrested and imprisoned in Zimbabwe. (A-231-35). The purpose of punitive damages is to punish. Sterner v. Wesley College, Inc.. 747 F.Supp. 263, 268 (D. Del. 1990). In light of Mr. Christ's website, an award of punitive damages would
10
If there is any question as to the impact of such public accusations, Mr. Zographos (who, though treated unfairly by Mr. Christ, was not attacked nearly as much as was Dr. Cormick) testified on deposition as to the adverse effect Mr. Christ's website has had on his business. (Ex. D at 25-26, 30-37). 10
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exceed the need for punishment, and would constitute an improper windfall to Mr. Christ. For these reasons, the Court should decline to award punitive damages. III. AN AWARD OF ATTORNEY'S FEES IS NOT WARRANTED. Under the American Rule, absent contract or statute, each litigant is responsible for his or her own attorney's fees, irrespective of the outcome of the litigation. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247 (1975). Exceptions to this rule are narrowly circumscribed. Miller-Wohl Co., Inc. v. Commissioner of Labor and Industry State of Mont., 694 F.2d 203, 204 (9th Cir. 1982). In seeking an award of fees, Mr. Christ relies exclusively on the argument that Respondents supposedly acted in bad faith in the litigation. However, this argument is without factual or legal support, and so should be rejected by this Court. A. THE SOUTH AFRICAN LITIGATION.
Prior to bringing suit in Delaware, Mr. Christ sued Dr. Cormick in South Africa. In connection with that litigation, Mr. Christ was required to post security for costs. (Christ Aff. ¶9). Dr. Cormick sought dismissal of that action on the ground of lack of personal jurisdiction. (Christ ¶10). Mr. Christ chose not to litigate the issue, but did not dismiss the action and seek a return of his deposit from the South African court. (A-87-88). Instead, he filed suit in Delaware. As a legal matter, Mr. Christ has not identified aby authority for this Court to award fees incurred in foreign litigation, especially where Mr. Christ was not successful in that litigation. Nor has Mr. Christ justified his failure to apply to the South African court for his fees and a return of his security deposit. Moreover, Mr. Christ has not established that South African courts award attorneys' fees in such circumstances, which would be important under principles of comity. 11
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As a factual matter, Mr. Christ has not provided any evidence that Dr. Cormick's defense in South Africa was made in bad faith (whatever the test is under South African law). Although he accuses Dr. Cormick of making inconsistent statements in the South African and this litigation, he offers no proof of this. Finally, as an evidentiary matter, a summary statement of fees such Mr. Christ provided is inadequate, as it prevents Dr. Cormick from making argument as to the reasonableness of the charges, and prevents the Court from deciding same. Intel Corp. v. Terabyte Intern., Inc., 6 F.3d 614, 623 (9th Cir. 1993). Mr. Christ's request for fees in the South African litigation is extraordinary, without legal or factual foundation, and so should be rejected. B. THE PRESENT LITIGATION.
As to Civil Action No. 07-60-GMS, contrary to Mr. Christ's argument, the U.S. District Court for the Eastern District of Pennsylvania did not find bad faith in Elan Suisse Ltd's decision to file suit in Pennsylvania. To the contrary, that Court expressly stated that it was not so concluding. Elan Suisse, Ltd. v. Christ, C.A. No. 06-3901, 2006 WL 3838237, WL Op. at *4 n.13, Pratter, J. (E.D. Pa. Dec. 29, 2006).11 Moreover, Mr. Christ has not provided any evidence that the claims in that action were frivolous. As to Civil Action No. 06-275-GMS, Mr. Christ's argument is that Dr. Cormick litigated in bad faith because he dared to defend himself against the claims instead of conceding at the outset, and further had the temerity to assert counterclaims. There is no evidence that either the defenses
11
Counsel in the Delaware litigation was not involved with the Pennsylvania litigation, and his not been able to obtain information from Pennsylvania counsel about events there. 12
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or counterclaims were meritless. The fact that Dr. Cormick was forced to abandon his claims and defenses because he lacked the financial wherewithal to come to Delaware for trial (or even for no reason whatsoever) does not render those claims and defenses meritless or made in bad faith. Mr. Christ accuses Dr. Cormick of "throw[ing] up two years of repeated procedural roadblocks and prolong the litigation as long as possible in an obvious and blatant attempt at driving up my expenses." (Christ Aff. ¶14). This statement is more venting of spleen than reasoned analysis. After Mr. Christ filed Civil Action No. 06-275-GMS in Delaware, the defendants moved to dismiss for lack of personal jurisdiction and failure to state a claim. The Court dismissed most of the defendants (other than Dr. Cormick) and dismissed the conspiracy claim. Although the Court denied the motion as to Dr. Cormick, there was no suggestion, and no finding, that Dr. Cormick's legal arguments were frivolous or made in bad faith, nor could there be. After the motion was decided, the Court held a conference and set a litigation schedule. That schedule was adhered to (the Court denied one motion by Dr. Cormick to continue the trial date). Moreover, any expenses being driven up were the results of Mr. Christ's serial filing of motions for judgment on the pleadings and for partial summary judgment, as well as discovery disputes he
13
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caused.12 As such, Mr. Christ's suggestion that Dr. Cormick did anything wrong in terms of litigation conduct is simply frivolous. Mr. Christ next argues bad faith because of a comment at the last hearing stating "good luck trying to collect [any judgment]." For reasons unexplained, Mr. Christ considers this to be "blatant abuse of the federal judicial system and its limited resources...." (Christ Aff. ¶6). However, this statement merely expresses the fact that Dr. Cormick has no money to pay any judgment. Mr. Christ does not believe this (A-235-38), of course, but that does not change the fact. Nor does it mean that Dr. Cormick's legitimate attempt to defend himself and seek redress of his grievances against Mr. Christ constituted acts of bad fath in the law. In addition to these points, Mr. Christ is not entitled to attorney's fees because he has not submitted proper evidence of them. As noted above, a party seeking attorney's fees has an obligation
12
Mr. Christ's position is not without irony given his actions during the discovery phase. Most notably, in connect with Mr. Christ's fraud claims, Dr. Cormick propounded an interrogatory asking Mr. Christ to identify the statement(s) he claimed were false and upon which he claimed to rely. Mr. Christ produced over 17,000 pages of documents on cds (in a non-text-searchable format), and responded that the statements could be found therein. Dr. Cormick objected on the ground that such response violated Fed. R. Civ. P. 33(d)(1). Mr. Christ refused to alter his position, necessitating a conference call with the Court. The Court instructed Mr. Christ to either identify the specific statements or the specific documents containing the statements. After delaying (over Dr. Cormick's objections) for several months, Mr. Christ submitted revised interrogatory responses, identifying over 200 documents which he claimed contained false statements upon which he relied. As this still required Dr. Cormick to locate needles in a haystack, another teleconference with the Court ensued. Ultimately, Mr. Christ's counsel acceded to the suggestion of Dr. Cormick's counsel that Mr. Christ take a yellow pen and highlight the alleged statements. Although this was done, at his deposition Mr. Christ revealed that it was done incorrectly, with Mr. Christ highlighting statements he claimed to be false, without regard to whether he was claiming reliance on them. This required Mr. Christ to engage in further editing, which still may not have been done properly. (B-370-71). 14
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to produce detailed bills, not mere summaries, so the Court can determine whether such fees are reasonable. Intel Corp., 6 F.3d at 623. That was not done here, and such omission is important. For example, is Mr. Christ seeking fees for litigating the claims against the defendants who were dismissed on motion? Such would be improper. Moreover, is he seeking fees for motions he filed which were not granted, or for discovery disputes that were resolved against him? Another important issue is whether he is entitled to claimed fees equal to or in excess of his claim for $250,000. It is, of course, Mr. Christ's right to fight for principle, but that does not mean that such fees are reasonable when he seeks to impose them on Dr. Cormick. Mr. Christ has not offered any compelling reason to depart from the American Rule. As such, this Court should deny his request for an award of fees. IV. PRE-JUDGMENT INTEREST. As noted above, Respondents strongly oppose the award of any damages beyond the $250,000 pleaded in the Amended Complaint. If, however, the Court decided to award additional amounts, Respondents wish to point out to the Court that, under Delaware law13, pre-judgment interest may not be awarded as to punitive damages, Tekstrom, Inc. v. Savla, C.A. No. 03-06-0033, 2005 WL 3589401, WL Op. at *1, Trader, J. (Del. Comm. Pls. Nov. 22, 2005), and there is no Delaware authority for an award of pre-judgment interest on attorneys' fees, which remain unliquidated until the amount (if any) is set by the Court.
13
In diversity cases, the Court must look to state law to determine the entitlement to prejudgment interest. W.A. Wright, Inc. v. KDI Sylvan Pools, Inc., 746 F.2d 215, 219 (3rd Cir. 1994). 15
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CONCLUSION Mr. Christ has not established a prima facie case for damages beyond the $250,000 pleaded, or for punitive damages or attorney's fees. As such, there is no need for an evidentiary hearing.14 WHEREFORE, for the foregoing reason, Respondents respectfully request that the entry of default judgment limit Mr. Christ's compensatory damages to $250,000, and deny his request for punitive damages and attorney's fees. Dated: June 9, 2008
Respectfully submitted,
/s/ David L. Finger David L. Finger (DE Bar ID #2556) Finger & Slanina, LLC One Commerce Center 1201 Orange Street, Suite 725 Wilmington, DE 19801-1155 (302) 884-6766 Attorney for Brett J. Cormick and Elan Suisse International Holdings (USA) LLC (defendants in Civil Action No. 06-275-GMS) and Elan Suisse, Ltd. (Plaintiff in Civil Action No. 07-60-GMS)
14
Of course, Mr. Christ should not be permitted to use his reply brief to supplement the record in attempt to correct his deficiencies. D. Del. L.R. 7.1.3(c)(2). 16
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From: Sent: To: Subject:
Bob We are mates
Dr Brett Cormick [[email protected] Monday, March 01 20043:15 AM Bob Christ Re: "The Open Komono Agreement"
J
We look after each other I am not even letting you anywhere near the company until you walk out of BNP going .. " er h
; -)
OK you know what
this could just be real"
Brett ---- Original message --- >Date: Sun, 29 Feb 2004 13:48:10 -0500
>From: "Bob Christ"
>Subject: "The Open Komono Agreement"
>To: "Brett Cormick"
>
>You've heard of Open Skies?
>
Well ...
>I'm thinking we can just sign the e-mail, but I think a simple one page >document will do the job. I just want something in writing in case Mr. >IRS man comes a-knockin' at my door and asked why I was trying to >launder all that money. > >Let me know your feedback asap. I'm ready to roll. I'll send over >money to the appointed accounts this week (as soon as I can find where >the fuck Met Life put my $200k). > >If this thing takes off, it is because of you. I could never have
>pulled this off. If it tanks, well, then I have only myself to blame.
>I know the risks. With that said, let's rock-n-roll. I got some
>mountains to climb, some Poles to jump and some money to make. This is gonna be fun!
> >
Dr Brett Cormick elan capital 2 Lansdowne Row Berkely Square Mayfair London W1J 6HL Tel: +44 (0) 20 691 7890 Fax: +44 (0)20 7493 4935 Email: [email protected]
liThe contents of this electronic message and any attachments relating to the official business of elan capital and subsidiaries ("elan capital") are proprietary to elan capital. They are confidential, legally privileged and protected by law. Views and opinions are those of the sender and do not represent elan capital's views and opinions nor constitute any commitment by or obligation on elan capital unless otherwise stated or agreed to in writing by elan capital.
1
ROC 07378
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ROC 07379
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020808az.ac.txt 1
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ROBERT D. CHRIST, Plaintiff/Counterclaim Defendant; v. BRETT J. CORMICK and ELAN SUISSE INTERNATIONAL HOLDINGS (USA) LLC, Defendants/Counterclaim Plaintiffs. ) CONFIDENTIAL ) ) ) C.A. No. ) 06-275-GMS ) ) ) ) )
Telephonic deposition of APOSTOLOS ZOGRAPHOS taken pursuant to notice at the Law Offices of Reed Smith, LP, 1201 North Market Street, Suite 1500, Wilmington, Delaware, beginning at 9:00 a.m. on Friday, February 8, 2008, before Ann M. Calligan, Registered Merit Reporter and Notary Public. APPEARANCES: THAD J. BRACEGIRDLE, Esquire REED SMITH LLP 1201 North Market Street - Suite 1500 Wilmington, Delaware 19801 on behalf of the Plaintiff/Counterclaim Defendant; DAVID L. FINGER, Esquire FINGER & SLANINA, LLC One Commerce Center 1201 Orange Street - Suite 725 Wilmington, Delaware 19801-1155 on behalf of the Defendants/ Counterclaim Plaintiffs.
WILCOX & FETZER 1330 King Street - Wilmington, Delaware 19801 (302) 655-0477 www.wilfet.com
2
1 2
APOSTOLOS ZOGRAPHOS, the witness herein, having first been Page 1
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020808az.ac.txt duly sworn on oath, was examined and testified as follows: EXAMINATION BY MR. FINGER: Q. Mr. Zographos, I hope I am pronouncing your
name correctly. A. Q. Yes. For the record, I'm David Finger. I represent
Brett Cormick and Elan Suisse International. So you understand the process, I'm going to begin by asking you a series of questions. am finished, Mr. Thad Bracegirdle, representing Mr. Christ will ask you some questions. If, at any When I
time, either of our questions are unclear to you, please let us know and we will attempt to restate them in a clearer manner. A. Q. Okay. Also, if, at any time, you need to take a break
for any reason for a couple of minutes, let us know and we will do our best to accommodate you. A. Q. All right. Finally, because we are working by telephone,
3
Apostolos Zographos - Finger 1 2 3 4 5 for the court reporter's benefit, please make sure that you answer our questions with words as opposed to saying "mm-hmm" or shrugs which she can not see or get down. And also try not to speak too quickly.
Otherwise she may get some blisters on her fingers. Page 2
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A. Q.
Right.
Okay.
020808az.ac.txt Understood.
All right.
Could you please begin by stating
your full name for the record? A. Q. A. My full name is Apostolos Zographos. And where were you born, sir? I was born in Masvingo, Zimbabwe, in 1955 on
May 1st. Q. Could you please give us a brief history of
your education? A. Right. I went to school in Masvingo. I
completed my A level studies. there.
That's the high school
I was a school prefect in my final year, and I
achieved the best eligible results in my year and was awarded a commendation, a prize for that. that -Q. A. Q. Excuse me. Yes. For the benefit of those of us here in the Before you go on -After
States, what does it mean when you say you were a
4
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 prefect? A. Well, it's with an English-based school system. That's where -- I would imagine
So we had prefects.
something like monitors that you might have in America. But in sort of a position of some authority
over the other students at the school. Q. A. Thank you. Right. Please continue.
After I finished my schooling, I Page 3
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020808az.ac.txt studied at university in South Africa for a bachelor of commerce degree. Q. A. Q. A. What was the name of that university? Rhodes University in Grahamstown. Did you have any post-university education? Yes. Well, in my final year at university, I
was selected to go overseas on a graduate student exchange work program, and I spent six months in Greece. And then, after that, I returned to South Africa to Johannesburg and I started working there. was trainee manager in the property department of an investment company. They sent me to the University of I
Capetown Business School for a two-week management program. And I'd been with the company for almost two
years when I went over to America to study for an MBA
5
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 at the University of Southern California. Q. A. Q. Did you receive your MBA degree? Yes. I have received my -- I did receive it.
You mentioned that you were working for an Could you please give us a brief
investment company.
history of your work background after that? A. Okay. Well, I worked for that investment
company for almost two years as a trainee assistant manager in the property department. America to study for the MBA. I went over to
After I completed the
MBA, I returned to South Africa and I started working Page 4
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020808az.ac.txt for a merchant bank in Johannesburg by the name of UAL Merchant Bank. I started off as a trainee investment I was then
manager in the investment department.
moved over to the research department, and I was there for a while. And I was due to go over into the
capital markets division, but my father passed away in Zimbabwe, and my brother who was also living and working in Johannesburg -- we left South Africa to return to Zimbabwe. Q. A. What did you do after you returned to Zimbabwe? My brother and I carried on with my late
father's businesses which was wholesale and retail and property development and management. And that was
6
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 in Masvingo. 19 -- at the end of 1985, '86. In 1997 I opened up a tire retread factory It was probably the most advanced
technologically tire company in Zimbabwe with the latest technology from South Africa, and I ran that company until I sold it off in 2001. And then I left Zimbabwe in 2001 to come over to the Seychelles. Q. A. Q. Are you currently living in the Seychelles? Yes. I've been living here since October 2001.
For the benefit of us here, where are the
Seychelles Islands located? A. Seychelles Islands, it's a group of islands,
115 islands located four degrees below the equator in Page 5
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020808az.ac.txt the Indian Ocean, about 1,000 miles from the African coast. Q. Are you involved in any business in the
Seychelles? A. Yes, I am. I'm involved in the registration of
offshore companies. Q. Thank you. I'd like to now change the topic Do you know Dr. Cormick?
over to Dr. Brett Cormick. A. Q. Yes, I do.
When and how did you meet him?
7
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 A. I met Brett Cormick in the mid 1990s. It was
either 1994 or '95. his wife Jennifer.
When he came out to Zimbabwe with I was introduced to him by his
mother-in-law who was showing off Jennifer's husband off to the community and what a fine catch Jennifer had managed to land. And then I met him whenever he
and Jennifer came out to Zimbabwe after that. Subsequently they moved to Zimbabwe. Q. A. Did you develop a friendship with Dr. Cormick? Yes. Not immediately on the first meeting. It
was a very brief meeting. to me by his mother-in-law. at the theater in Masvingo.
As I say, he was introduced I met him again in 1998 He came up to me
immediately he saw me to offer his condolences on my brother's death. there on. And we developed a friendship from
And then it was at that time, when he was
out there in 1998 with Jennifer that Jennifer and her Page 6
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020808az.ac.txt mother stated to me that Jennifer and Brett were planning to move to Zimbabwe during the next 12 months and that they would be moving into the house that was currently occupied at the time by Jennifer's brother, who then bought a house for himself and his family, and Brett and Jennifer went and moved to Zimbabwe in 1999 and moved into the house which was about -- not
8
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 even a five-minute walk from where I was living at the time. Q. And after Dr. Cormick and his wife moved to
Zimbabwe, how frequently did you interact with him? A. Frequently. Several times a week. I would go
over to their place. place.
They would have dinner at my They had
I would have dinner at their house.
dinner with me New Year's Eve of 2000 with myself and a group of other friends at my house. And apparently
that was the night that their daughter Jessica was conceived, and subsequently they asked me to be a godfather to Jessica. Q. A. Q. Did you agree to that? Yes, I did. As far as you knew, at that point that
Dr. Cormick moved back to Zimbabwe, was he employed in any manner? A. I wasn't aware that he was employed, but I knew
that he would occasionally go overseas for work purposes. So I presumed that he was doing some work Page 7
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020808az.ac.txt 21 22 23 24 of some sorts. Q. doing? A. No, I didn't because in those -- at that stage Did you ever ask him about what work he was
9
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 of the friendship, I mean, that was more or less a private thing and I didn't want to pry. It was only
later that we -- when we became involved in sort of quite a few community activities and the friendship was very solid that we started talking about investment ideas. Q. Could you please describe the community
activities that you just referred to? A. Well, okay. Brett -- he was quite actively
involved with both the Kyle College Secondary School in Masvingo and also the Kyle Junior Primary School in Masvingo. He would be asked by the headmasters to
give inspiration-type talks and activities for the students. And he was also involved in sponsoring
several children whose parents were not able to afford to pay for the school fees. I know that at Kyle
Primary School, he was paying the school fees of -- I think it's either eight or nine children, whose parents weren't able to pay for their fees. Other community activities that I was involved with him, there was a child there at school whose -- who was actually a very good swimmer and whose parents could not afford to send him to South Page 8
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020808az.ac.txt Africa for an international competition.
So Brett and
10
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 I put some money together to pay for this child's trip to South Africa so he could participate in the competition. Other things that Brett had got involved in was a lady and her children, who was suddenly widowed. Her husband had been a priest, and he was And this woman was left
killed in a car accident.
destitute, and she was going to be thrown out of the church house because there was some scandals surrounding her husband's death. And Brett, when he
heard about the situation, he put up a whole lot of money together and went and handed it over to her. There was also the case of our local private vet, who relied primary on income generated from working with farmers' animals, mostly livestock, cattle. But because of the farm situation in
Zimbabwe, a lot of the farmers were vacating their properties and a vet was not earning the income that he was earning before. And he also had a problem So
having to pay for his children's school fees.
Brett, again, got a whole lot of money together and went and handed it over to the vet. hand it over. Actually didn't
Put the money a plain brown bag and put
it in the mailbox at the entrance to the house.
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Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 A. No. And then also I know, when he and Jennifer moved to Harare, they were both involved with paying to feed and provide vitamins for a big group of homeless street children who didn't have homes and didn't have parents. Q. Yeah. He was -- there was that.
You've mentioned several times about Was that simply a
Dr. Cormick putting money together.
question of him paying out of his own pocket, or was it fund raising from various other sources. MR. BRACEGIRDLE: Objection to form. One or
Primarily out of his own pocket.
two instances he mentioned it to me and I offered to assist as well by way of cash, which I did. Q. Speaking of community involvement, are you a
member of the Round Table? A. Yes, I am. I was a member of Round Table in
Zimbabwe.
And I am an honorary member of Round Table Brett in Zimbabwe always sponsored the And there was
in Seychelles.
Round Table fund raising activities.
also an instance where he made an anonymous donation to the old people's home in Masvingo. Q. is? A. Well, the Round Table is an international Could you please explain what the Round Table
12
Apostolos Zographos - Finger 1 fellowship group of like-minded men. Page 10 Parts of the
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020808az.ac.txt 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 world have opened up and have taken female members as well. But primarily it's a fellowship organization
pretty much along the lines of Rotary International and Lions International. And out of our fellowship we
commit ourselves to generating funds, raise funds through various activities to donate to community projects in whatever community that we are in. Here in Seychelles the Round Table primarily has supported the Ministry of Health by way of raising funds to buy ambulances. Last year we
raised funds to purchase a mammogram machine to be donated to the Ministry of Health, specialized ambulance for disabled people so they can be collected on a daily basis from their homes and taken to the rehabilitation center and then delivered back to their homes afterwards. Q. You describe a number of community activities Did he keep his involvement
involving Dr. Cormick. anonymous? A.
The majority of the time, yes.
There were
times, you know, when he was asked by the headmasters of schools to assist with student activities and to give talks and lectures, motivational lectures,
13
Apostolos Zographos - Finger 1 2 3 4 motivational talks, organizing and arranging Outward Bound-type activity, prefect selection courses, and also, because it was a small community, with very little social facilities -- there wasn't a cinema in Page 11
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020808az.ac.txt 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 the town; there was only the theater -- Brett got involved in the theater as well, helped to increase membership numbers. He would organize activities for
children during the holidays, you know, adventure-type activities at game lodges during the day, that sort of stuff. Q. You mentioned Outward Bound, could you explain
what that is? A. Well, basically you get a whole lot of children
together and put them through some things similar to an obstacle course where they would have to undergo sort of a whole lot of physical actions and endurance tests. And also he would evaluate them as well and
see how they would cope. Q. You discussed all of these things that Do you have any personal knowledge
Dr. Cormick did.
of what Dr. Cormick's reputation was like in the community? A. Well, personally speaking, I would say that He
people are very grateful for what he was doing.
14
Apostolos Zographos - Finger 1 2 3 4 5 6 7 was certainly seen to be active, more than a whole lot of other people in the community, and he was a newcomer to the community as well. And you know,
there were individuals that he helped out as well financially, also, as I said, with the instance of the youngster that was selected to represent Zimbabwe in an international swimming competition. Page 12 So, yes, the
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020808az.ac.txt 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 parents were very grateful for Brett's involvement. Q. You said that once your relationship, your
friendship with Dr. Cormick solidified, then you would be able to discuss with him his work or his employment. A. Did you ever learn what his work was? He had told me that he had been
Well, yes.
involved with some major European financial institutions and had connections with some American financial institutions, that he had held fairly senior positions among those institutions. Q. Did he ever identify any of those institutions
by name? A. No. Not at the time he didn't. I didn't
inquire. Q. Are you familiar with a project of
Dr. Cormick's call Elan Suisse? A. Yes, I am familiar with that.
15
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 Q. What is your understanding of the business of
Elan Suisse or the business Elan Suisse was intended to have? A. Brett and I had this concept whereby, through
his connections with these financial institutions in Europe, we would approach investors and put forward an investment proposal to them that, with Brett having access to -- firsthand access to investment opportunities overseas, that people in South Africa normally don't have -- they are sort of stuck at the Page 13
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020808az.ac.txt 11 12 13 14 15 16 17 18 19 20 21 22 23 24 back end of -- well, at the end of the investment queue just investing in bank investments offering very low returns. Brett had this concept of getting investment opportunities from these financial institutions, getting potential investors to invest, the idea being that we wouldn't charge them anything at the time, but once they started achieving a return on investment of over 20 percent, then, we would be charging them on a rate, pro rata. Q. A. What was the intended market for this business? Well, basically, it was going to -- we were And at that stage, I
going to start off in Zimbabwe.
was planning to sell my business in Masvingo and move
16
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 to Seychelles, and this would be an opportunity for me to be able to conduct Brett's line of business over here and approach investors both here and in the region, mostly Mauritius and then hopefully, after that, in Reunion as well. Q. What sort of investment products, did Elan
Suisse intend to market. A. Well, they would be initially IPOs, also
looking at biotechnology stocks, renewable energy, commodities, and then also U.S. government bonds. Q. idea? A. Yes, I did. You know, having worked in South Page 14 Did you consider this an innovative business
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020808az.ac.txt 14 15 16 17 18 19 20 21 22 23 24 Africa with UAL Merchant Bank and having a slight feel for investments, stocks, shares, I thought this was a good opportunity for investors to generate returns and this would be a good line of business for me. Q. Was this type of business in existence in
Zimbabwe at the time? A. Q. A. No, it wasn't. Do you know? There wasn't anything like it. There wasn't
anything like it available in the region. Q. Do you know why that is?
17
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 A. Well, no one had access to the markets that
Brett had, and no one could actually -- they didn't have access to the investments that Brett would have had. And, you know, we just had individual financial
advisors there, but basically they were offering basic bank-type portfolios. Q. Did you personally invest any money into the
project? A. Q. A. Q. A. Q. Yes, I did. How much did you invest? $81,667. Is that American dollars, Zimbabwe dollars? Yes. U.S. dollars.
And what did you receive in exchange for that
investment? A. Well, Brett issued me with a receipt, so I have Page 15
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020808az.ac.txt 17 18 19 20 21 22 23 24 that on file. And we were going to take it from there
once I moved to Seychelles and got the company registered and operational here. Q. Did you engage in any due diligence or
investigation prior to investing the money? A. Q. No, I didn't. What, if anything, did Brett do to confirm his
access to these markets?
18
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 A. Well, by that stage he was telling me all the
names of companies that he had access to and, you know, showed me business cards that he had with companies that he had worked with. And he just said
that he had access to these people and he was operating a similar type pilot scheme in Zimbabwe with a whole lot of private schools, independent schools in Zimbabwe actually invested funds through Brett and they achieved far greater than average returns. far as I was concerned, he was actually in a -proving what he claimed to be able to do. Q. A. Did you confirm that with any of the schools? Well, I confirmed with the headmaster of the So as
Lennox School at the time. Q. A. What did the headmaster tell you? He just said that the school had invested funds
that they would normally put in coal deposits or in government treasury bonds, but through the investments they made on Brett's advice, his words were something Page 16
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020808az.ac.txt 20 21 22 23 24 along to the effect that they were achieving phenomenal returns, far better than they would have been able to under other circumstances. Q. Did you take an active part in the development
of Elan Suisse beyond investing money?
19
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 A. Q. A. No. Not in Zimbabwe. Only in Seychelles.
What did you do in Seychelles for Elan Suisse? Well, Brett and I came up to Seychelles in May
2001, and we had a series of meetings with various people here in Seychelles. advisor to the president. We met with the special We met the advisor to the
vice-president, who was the minister of finance at the time. We met with the manager of the central bank We met the manager of the And we met various
here in Seychelles.
government social welfare fund. individuals.
We also met with the manager of the Brett offered to
Seychelles Institute of Management.
lecture students for free whenever he would come out to Seychelles. We then, while we were here in Seychelles in May 2001, we also took a trip to Mauritius where we met the director of the central bank there. We also
met the consultant to the minister of finance, the managing director of Mauritius Commercial Bank, which is the largest bank in Mauritius, and we met with the largest investment group in Mauritius as well. Q. What would you do at these meetings? Page 17
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020808az.ac.txt 23 24 A. Well, I would introduce Brett, and he would
explain the concept of Elan Suisse and the investment
20
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 prospects, and he would explain to them what would be involved, what if they were to invest. Q. A. What was the purpose of these meetings? Well, basically it was to -- initially,
primarily for me to get Elan Suisse established here in Seychelles and, secondly, offer both public and private individuals and institutions the opportunity to be able to invest. Q. What sort of reaction did you observe from
these presentations? A. Well, wherever and whoever we met, the reaction
was very positive, and everyone was very keen and inquired when they would be able to invest. They were
as keen as mustard to jump in and start immediately. But we said, no, this is still in early stages and we will keep you posted of developments. And when we are
established and operational we will let you know and we will meet you again and take it from there. Q. Were there any firm commitments to invest from
any of the people to whom you made presentations? A. Well, yes, certainly. The government of
Seychelles through various departments and the central bank and the welfare fund were very keen to invest as were institutions and individuals in Mauritius as Page 18
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Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 well. Q. Did you meet a gentleman named James
McWilliams? A. Q. A. Yes, I did. Who is -Well, wait. I know James McWilliams, but I
didn't actually meet him at the time of Elan Suisse. I introduced Brett to him -Q. A. Q. A. All right. -- by way of correspondence. I see. Who is he?
James McWilliams was also born and brought up He went to school there.
in Masvingo, the home town.
He was also at Rhodes University, and he was also working at UAL Merchant Bank when I worked there. Q. What was the reason for introducing Dr. Cormick
to Mr. McWilliams? A. Well, at the time, Mr. McWilliams was working
with a large investment group in South Africa, and the idea was for James to meet Brett and discuss the project and for Brett to describe to him what would be involved because James had access to high net worth individuals and pension funds that were investing through him through the company. So, yes, the idea
22
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020808az.ac.txt Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 was for Brett to meet James and to find out if James, or through his company, would be interested in investing. Q. Do you know whether Mr. McWilliams ever
expressed an interest in investing in Elan Suisse? A. Well, no. Initially, he was -- he showed some
interest, but then he said the rest of the investors that he had on their books were able to actually invest directly overseas. So as far as I'm aware,
nothing actually ever came of it. Q. Did you make any presentations about Elan
Suisse without Dr. Cormick? A. I did here in Seychelles after he had left and
to one or two individuals in Zimbabwe before I had left Zimbabwe to come to Seychelles. Q. Bank? A. Q. A. No, I didn't. Do you know if anyone did? I'm not sure whether Brett might have done so. Did you ever make a presentation to Barclays
I'm not aware or I can't recall, but I simply wasn't involved in that. Q. Were you required to obtain any permits from
any Seychelles entities to operate Elan Suisse in the
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Apostolos Zographos - Finger 1 2 Seychelles? A. Well, basically I had to register the company Page 20
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020808az.ac.txt here in Seychelles and pay for the company license. Q. A. Were you required to get a residence permit? Well, it's a fairly complicated procedure here The permit that I was granted was a
in Seychelles.
combination work and residence permit based on the Elan Suisse project. Q. Apart from making presentations, did you
provide any type of investment advice to Dr. Cormick for the benefit of Elan Suisse? A. Q. Suisse? A. Well, I moved to Seychelles and Brett had No. What happened to your investment in Elan
advised me that it would take him some time to fine tune everything. And he was busy meeting with And he would be overseas So
potential investors.
speaking to the various financial institutions.
some time passed, and in the meantime I just had to keep on telling the people here in Seychelles what Brett was doing. And then, I would ask Brett what was He was saying he was He was
going on, what was happening.
conducting meetings, everything was positive.
24
Apostolos Zographos - Finger 1 2 3 4 5 registered with the financial service board in South Africa. He had independent financial advisors lined So, as far as I was
up in various institutions.
concerned everything was progressing positively and going ahead. It was just a matter of time before Page 21
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020808az.ac.txt everything got into gear and kicked off and became operational. Seychelles. It was during 2005 that I inquired of Brett what was happening, and he told me about the fact that Mr. Christ had published on the Internet, and around about that time there was a letter that appeared in the Financial Gazette in Zimbabwe written by Mr. Christ inquiring about Brett. this all was very negative publicity. So I told Brett that I would actually have to advise the people here in Seychelles of the situation. And it seemed to me that there was -- this And Brett And of course, And then I would become active here in
was building up to some sort of litigation.
confirmed that and he said, "Well, we can't do anything if there's going to be litigation. go ahead with the project." We can't
So, as far as I was
concerned, the project never took off. Q. To what did you attribute that?
25
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 A. Simply the fact that Mr. Christ published on
the Internet. Q. Do you have any personal experience that would
confirm that? A. Q. A. Yes. What would be that experience? Well, of course, I advised people here in
Seychelles of the situation and gave them details. Page 22
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020808az.ac.txt Obviously, they looked up the website and just said, well, if this is what is going on, there is no likelihood in any way that they would invest. everything just collapsed basically. Also a side effect of that was that, because this project didn't take off as planned, my situation here in Seychelles, based on the work permit and residence permit of Elan Suisse, was now jeopardized, and I stood to be refused permission to reside here any longer. And that's when I got And so
involved with this other business, the registration of offshore companies, and was able to renew my work and residence permit based on that. But I have had
negative reaction to the website through prospective clients wanting -- who were looking at registering offshore companies here in Seychelles. And what they
26
Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11 would do is Google my name on the Internet and up pops Mr. Christ's website and people would take one look at that and say, well, if this is what you're involved in, there's no way that we are going to operate or do any business with you. So that's had a negative
impact on my other business. Q. Do you actually have conversations with people
where they decline to do your business because of the website? A. Yes. MR. BRACEGIRDLE: Objection to form.
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Q. A.
020808az.ac.txt Can you give an example? I was on a trip to Zimbabwe and I met
prospective clients wanting to register offshore companies here in Seychelles, and the meetings would go fairly well. In one instance one guy contacted me
afterwards and he said, "Sorry, I can't do it any more." And I asked him why. And he said, "Well, I
had to look at your name on the website on Google. Came up with this website, and if that's what you're involved in, there's no way I'm doing business with you." Q. As far as you're concerned, based on your
experience, did you consider the Elan Suisse business
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Apostolos Zographos - Finger 1 2 3 4 5 6 7 8 9 10 11
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