Vanek v. Samsung EMS Co. Ltd. et al

On April 14, 2023, Yaakov G. Vanek (“Plaintiff”), represented by Gary S. Graifman and Melissa R. Emert of Kantrowitz, Goldhamer & Graifman, P.C., filed a contract lawsuit against Samsung Electronics Co., Ltd., Samsung EMS Co., Ltd., Sang-Won Lee, J.S. Park, and Does 1 through 20, inclusive (collectively, “Defendants”), seeking damages with interest, for alleged demand of bribes and extortion in connection with a fully signed agreement, and amendments to that agreement in violation of the Racketeer Influenced and Corrupt Organizations (“RICO”) Act. This case was filed in the U.S. District Court for the Southern District of New York.

In the complaint, the plaintiff claimed, “Plaintiff was a shareholder of Ngen with a binding, enforceable and irrevocable signed written contract to sell shares of stock of Ngen directly to Samsung EMS. Samsung EMS, after agreeing to buy Plaintiff’s shares, repeatedly demanded a ‘side agreement’ bribe to close the transaction with Plaintiff and the other Ngen shareholders.”

Plaintiff then alleged, “The bribe was made plainly and unequivocally in written communications by the Defendants and others acting with the named Defendants. The Defendants demanded that Plaintiff pay a kickback of a portion of the proceeds from the sale of the Ngen shares as a condition of the transaction. The payment which would have amounted to millions of dollars was to be made to offshore bank accounts in the Bahamas which belonged to certain of the Defendants.”

The plaintiff further alleged, “When Plaintiff refused to pay the bribe in connection with the sale of his shares, Defendants notified Plaintiff that they were delaying the closing date of the transaction. Defendants delayed the closing multiple times in order to extort the payment of the bribe, but never rescinded the transaction.”

The plaintiff also alleged, “The purchase of the shares of Ngen was memorialized in a securities purchase agreement and commitment letters. However, rather than perform the lawful transaction to which they had agreed, Defendants and their associates and conspirators embarked on an illegal scheme to extract and extort millions of dollars in bribes from Plaintiff, as well as the other Ngen shareholders not parties to this action.”

Additionally, the plaintiff alleged, “The scheme involved, among others, the Defendants and nonparty Clifford M. Rhee (‘Rhee’), the president, director and shareholder of Ngen. Rhee negotiated the terms of the Samsung transaction with Defendants. As part of the transaction, Defendants demanded that Defendant Samsung EMS’s purchase of the shares of Ngen be conditioned on a ‘side agreement’ which provided for the payment of kickbacks in an amount equal to 20% of the purchase price for the shares of Ngen. Rhee and certain of the Ngen shareholders agreed. Plaintiff declined. On information and belief, Rhee, without Plaintiff’s consent or authorization, developed schemes to deliver on the demanded kickbacks without requiring Plaintiff’s consent, authorization or knowledge.”

Plaintiff then alleged, “Rhee and the Defendants purported to accept Plaintiff’s position, and Plaintiff relied on their false reassurances and representations.”

The plaintiff further alleged, “Having been induced into the belief the transaction would proceed in a compliant and lawful manner, Plaintiff consummated the deal by signing the securities purchase agreement and an amendment to that agreement as more fully described below. The purchase did not occur despite multiple reassurances to Plaintiff by Rhee and written communications from the Defendants that the closing was merely delayed. The purchase under said agreement has never been rescinded, canceled or revoked notwithstanding Defendants’ corrupt failure to perform.”

Plaintiff presented four claims for relief, including claims for alleged breach of written contract, fraudulent inducement, and violation of the RICO Act.

In the prayer for relief, the plaintiff requested compensatory and treble damages with interest.

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