Mansoor Ijaz was embroiled in fraud case: Report

Mansoor Ijaz was accused by a European Bank of running a one-man business and obtaining loans that he was unable to repay on time.

Islamabad: Mansoor Ijaz, who single-handedly rocked Pakistan`s politics by his claims in the memo scandal, was accused by a European Bank of running a one-man business and obtaining loans that he was unable to repay on time, recently surfaced documents show, according to a media report.

The case that had come up in 2010 and other flip flops made by Ijaz could raise credibility issues for him in the memo scandal investigation.

Judge Charles E Ramos of the Supreme Court of the state of New York issued a judgement against Ijaz on September 25, 2010 after Banca Sammarinese di Investimento (BSI) of San Marino filed a suit for the recovery of a loan obtained by him, the Daily Times quoted court documents as saying.

Ijaz created a storm in political and diplomatic circles last year after he made public an alleged memo that sought US help to stave off a feared coup in Pakistan in the wake of killing of Osama bin Laden in May last year.

The suggestions of financial impropriety follow emergence last month of a music video in which Ijaz is featured as a commentator at a wrestling match featuring two nude women.

The Daily Times further reported that Ijaz has made contradictory claims about the memo and was unable to produce any email or BlackBerry message that directly linked any Pakistani official to the memo he drafted and sent to the US military chief in May last year.

Legal experts questioned whether these "credibility issues" would allow Ijaz to convince the Pakistani judicial commission probing the memo issue that he is telling the truth about the document`s origins when he is the sole witness and "corroborative material" in the form of BlackBerry messages and telephone logs he presented were so "heavily dependent on his personal account and explanation", the report said.

In its filings in the New York court, BSI of San Marino said it had opened credit lines in favour of Ijaz and his companies - The Ijaz Group Inc and Aquarius - in 2007 and 2008.

Ijaz had pledged shares of his companies as collateral, which later turned out to have no value.

The case raised questions Ijaz`s "smoke and mirrors approach" to business and his using the impression of high-level political connections to obtain money while speaking of his immense wealth to develop political ties, the report said.

In fact, in 2008 Ijaz had written to the bank`s directors that as part of efforts to repay the loans, he plans to launch a new USD 50 million venture with major investment by a "large Indian family" with real estate investments around the world and close ties to Tata Motors.

A judicial panel recently allowed Ijaz to record his testimony via a video-link from London after his repeated failures to appear before it. BSI told the New York court that The Ijaz Group and Aquarius were only a cover for him and did not really have any current business that the bank could identify or recover money against.

"Defendants Ijaz Group and Aquarius ignored all corporate formalities in the formation and operation of such entities. Ijaz was the only officer and director of the Ijaz Group. Ijaz transferred hundreds of thousands of dollars borrowed by the Ijaz Group from plaintiff (the bank) to himself. Ijaz considered the Ijaz Group`s credit line his personal line of credit," it said.

BSI`s lawyers Herzfeld and Rubin PC said in the bank`s complaint that "Ijaz used the lines of credit plaintiff had extended to Ijaz Group and Aquarius for his personal needs, including payment of mortgages and brokerage account fees and used said lines of credit after his personal line of credit had reached its final limit".

The lawyers further said, "Aquarius never entered into any contracts nor did it have any employees. Aquarius never filed tax returns".

Though BSI`s suit was a civil one to recover money, it included charges of fraud that could be the subject of separate criminal proceedings, though none were initiated, the report said.

"Ijaz used control and domination over the Ijaz Group and Aquarius to commit fraud and to breach his legal duty and the legal duty of the controlled corporations to repay all monies due to the bank by such corporations," BSI told the New York court.

It said Ijaz`s representation to the bank was "false, wilful, fraudulent and intended for BSI to rely on it". BSI`s filing in court on June 06, 2010 said: "Ijaz owes BSI EUR 661,972.16 plus interest from October 01, 2008. The Ijaz Group Inc owes BSI USD 873,692.46 on account No 470 and EUR 1,942.80 on account No 469 plus interest from October 01, 2008.”

"Aquarius owes to BSI EUR 214,068.23 on account No 471 and EUR 130.36 on account No 798 for a total of EUR 214,198. 59 plus interest from October 01, 2008".

Ijaz accepted his borrowing from BSI to the tune of EUR 648,130 plus interest from August 08, 2008. He also acknowledged that the balance due by himself, The Ijaz Group and Aquarius was EUR 1.46 million plus interest from August 08, 2008.

In an e-mail for BSI`s directors dated March 10, 2008, Ijaz spoke of launching a new USD 50 million project called Aquarius Towers Las Vegas as part of efforts to repay the loans.

He claimed contracts to fund the first phase of the project were signed in Las Vegas on February 20, 2008. Ijaz further claimed the investor is a "large Indian family that has real estate investments around the world", including in Las Vegas, Dubai and India. This unidentified investor has "close ties with Tata Motors in India" and had "chosen to invest USD 10 million in our planned launch of a company to develop the world`s most energy efficient power-trains", he claimed.

New York State Judge Charles Ramos ordered in favour of BSI after the parties "agreed to entry of judgement in favour of plaintiff" and ordered Ijaz to pay USD 1.474 million to the bank in San Marino.


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