The Unit Trust Corporation, two foreign developers and several other corporate bodies have been sued in a New York court over a US$50 million (TT$320 million) alleged fraud involving a failed luxury villas project in the Turks and Caicos Islands.
Almost simultaneously, the UTC has won a Supreme Court judgment in the Turks and Caicos against the two developers to freeze US$85 million (TT$540 million) of their assets around the world.
In the newer lawsuit, filed on January 28 in the US District Court in Manhattan, 20 parties are suing Austrian developers Cem Kinay and Oguz Serim, and the UTC among others for at least US$50 million.
Corporations and individuals named in the lawsuit include Mandarin Oriental Hotel Group International, Turks development LP, Avatar Real Estate Services, Kinay’s wife, Majorie Kinay, and Kinay’s brother, Cenk Kinay.
The development over which they are being sued is a 209-acre luxury villas project started in 2008 on Dellis Cay island in the Turks Caicos. The UTC was a lender.
Parties suing the companies allege that they provided US$50 million of the US$75 million paid by buyers of the villas but less than US$7 million was spent on construction of the villas. The remainder of the money was stolen, the lawsuit alleges.
The main defendants are Kinay and Serim who are accused in the court documents of using clients’ money as a “personal piggybank” to pay of pre-existing debts and buy “an (US)$8 million Miami Beach home”.
After the project failed, the Port of Spain-based UTC placed the Dellis Cay development in receivership.
Last year it filed a separate lawsuit against Kinay and Serim to satisfy its own claims.
In a statement sent to the Express yesterday, the UTC said it was pleased that the Supreme Court of the Turks and Caicos this week ordered Kinay and Serim to freeze US$85 million in assets held by them globally and to “maintain these assets to satisfy the claims of the UTC against Kinay and Serim”.
The UTC said it filed the lawsuit a year ago to protect the interests of the UTC and its unit holders and that the Supreme Court dismissed all claims Kinay and Serim had brought against the local financial institution.
The current lawsuit brought against Kinay, Serim, the UTC and others in the New York court alleges that Kinay and Serim were assisted by their lender (the UTC) and that the UTC hid from purchasers that fact that the project’s US$62 million loan required a lumpsum payment of US$47 million after two years at 15 per cent interest.
The court documents allege that the loan gave Kinay time to sell condos to purchasers and take the money instead of building the villas.
UTC vice president Marketing and International Business, Gayle Daniel-Worrell, told the Express yesterday that the lawsuit was “totally without merit”.
She said she did not believe that US courts even had jurisdiction in the Turks and Caicos and that the UTC had a strong defence since it had just won an even larger judgment against the developers.