Texas Lawyer Sued Over Mongolian Business Deal Gone Bust
Law360, Dallas (March 28, 2013, 9:10 PM ET) -- A Texas attorney and former city judge was hit with a suit Wednesday alleging he defrauded the owners of a European communications holding company who partnered with him to invest in the launch of a Mongolian business.
Andrew Bain and David Stewart, the owners of Atlantic Group Ltd., say they provided financial backing for what was supposed to be a surefire business opportunity in Mongolia, but that attorney Ed Winfrey and his business partner Michael Plue lied about securing government licenses and used the investment money for personal and family expenses. The suit alleges fraud, breach of fiduciary duty and breach of contract, seeking punitive damages and the return of an initial $900,000 stake in the proposed business.
"Winfrey and Plue represented that, due to Winfrey's contacts with the Mongolian government, the business could have any project desired from a list of 114 construction and social services contracts," the suit said. "These representations were patently false."
Winfrey is a former municipal judge in Decatur, Texas, and had a solo practice in Fort Worth until April 2012. He's now the international legal adviser for the Zamyn-Uud Free Economic Zone in Mongolia and oversees Mongolian development for Akica Group LLC, according to his LinkedIn page. Plue formerly owned a collections business in California and is now chief operations officer for Akica Group.
According to the suit, Stewart and Bain, who knew Plue from their service together in the U.S. Marine Corps, agreed to invest in a company with the men on the strength of Plue's claim that Winfrey's extensive contacts with the Mongolian government would allow them to pick up a plum government contract that would net the company 50 percent profits on those projects. Winfrey also allegedly promised the company would earn a steady income from a lottery business in Mongolia.
But Winfrey and Plue falsified financial records showing they had completed work on the government projects and Winfrey falsified the translation of Mongolian government documents to make it appear he had secured a gaming license that would allow them to operate the lottery, the suit says. Winfrey allegedly used the money for personal expenses and an unrelated business and made direct payments to some of his family members.
Plue came clean about the misdeeds in October to Bain, a Colorado native living in Austria, and Stewart, who lives in Scotland, but by then it was too late to recover their money, according to the suit.
"Plue continued to conceal the truth from Bain and Stewart until it was far too late," the suit said. "Plue waited to disclose his knowledge to Bain and Stewart until after they had transferred $900,000 and the funds were improperly used."
Winfrey and Plue did not immediately respond to requests for comment Thursday.
Bain and Stewart are represented by Edward F. Fernandes andChristopher H. Taylor of Hunton & Williams LLP.
Counsel information for Winfrey and Plue was not immediately available.
The case is Bain et al. v. Winfrey et al., case number 048-265081-13, in the 48th Judicial District Court of Tarrant County, Texas.
Andrew Bain and David Stewart, the owners of Atlantic Group Ltd., say they provided financial backing for what was supposed to be a surefire business opportunity in Mongolia, but that attorney Ed Winfrey and his business partner Michael Plue lied about securing government licenses and used the investment money for personal and family expenses. The suit alleges fraud, breach of fiduciary duty and breach of contract, seeking punitive damages and the return of an initial $900,000 stake in the proposed business.
"Winfrey and Plue represented that, due to Winfrey's contacts with the Mongolian government, the business could have any project desired from a list of 114 construction and social services contracts," the suit said. "These representations were patently false."
Winfrey is a former municipal judge in Decatur, Texas, and had a solo practice in Fort Worth until April 2012. He's now the international legal adviser for the Zamyn-Uud Free Economic Zone in Mongolia and oversees Mongolian development for Akica Group LLC, according to his LinkedIn page. Plue formerly owned a collections business in California and is now chief operations officer for Akica Group.
According to the suit, Stewart and Bain, who knew Plue from their service together in the U.S. Marine Corps, agreed to invest in a company with the men on the strength of Plue's claim that Winfrey's extensive contacts with the Mongolian government would allow them to pick up a plum government contract that would net the company 50 percent profits on those projects. Winfrey also allegedly promised the company would earn a steady income from a lottery business in Mongolia.
But Winfrey and Plue falsified financial records showing they had completed work on the government projects and Winfrey falsified the translation of Mongolian government documents to make it appear he had secured a gaming license that would allow them to operate the lottery, the suit says. Winfrey allegedly used the money for personal expenses and an unrelated business and made direct payments to some of his family members.
Plue came clean about the misdeeds in October to Bain, a Colorado native living in Austria, and Stewart, who lives in Scotland, but by then it was too late to recover their money, according to the suit.
"Plue continued to conceal the truth from Bain and Stewart until it was far too late," the suit said. "Plue waited to disclose his knowledge to Bain and Stewart until after they had transferred $900,000 and the funds were improperly used."
Winfrey and Plue did not immediately respond to requests for comment Thursday.
Bain and Stewart are represented by Edward F. Fernandes andChristopher H. Taylor of Hunton & Williams LLP.
Counsel information for Winfrey and Plue was not immediately available.
The case is Bain et al. v. Winfrey et al., case number 048-265081-13, in the 48th Judicial District Court of Tarrant County, Texas.
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