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Reinaldo Ranni, Et Al. V. Willis of Colorado Inc., Et Al. 09-CV-22085

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Reinaldo Ranni, Et Al. V. Willis of Colorado Inc., Et Al. 09-CV-22085 Case 1:09-cv-22085-JAL Document 1 Entered on FLSD Docket 07/20/2009 Page 1 of 43 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION REINALDO RANNI, individually and 0 • 2 2 0 5 on behalf of a class of all other similarly situated Plaintiffs, CIV-LENARD Case No.: MAGISTRATE JUDGE V. GARBER JURY TRIAL DEMANDED WILLIS OF COLORADO INC., and FILED by—D.C. WILLIS GROUP HOLDINGS LTD., Defendants. • JUL 1 7 2009 STEVEN M. LARIMORE CLERK U. S. DIST. CT t CLASS ACTION COMPLAINT i• S. D of FLAT. — PLAINTIFF REINALDO RANNI ("Ranni"), individually and on behalf of a class of all others similarly situated, (collectively "Plaintiffs"), file this Class Action Complaint against Defendants, WILLIS OF COLORADO INC., ("Willis of Colorado") and WILLIS GROUP HOLDINGS, LTD. ("Willis Group") (collectively "Willis" or "Defendants"). INTRODUCTION 1. This is a class action against an insurance broker, Willis, who played an instrumental role in enabling Allen Stanford and his companies to perpetrate a massive multi- billion dollar fraud against scores of investors, largely Venezuelans and other South Americans. Through Stanford's Miami office, these investors purchased the now notorious Certificates of Deposit offered by Stanford International Bank ("SIB") relying on phony assurances that the CDs were insured, and SIB could be trusted as a sound bank. Willis supplied the proof for Stanford. From 2005 through 2008, undated "safety and soundness" letters went out to HOMERBONNER 1200 Four Seasons Tower • 1441 Brickell Avenue • Miami, Florida 33131 Telephone: (305} 350-5100 Case 1:09-cv-22085-JAL Document 1 Entered on FLSD Docket 07/20/2009 Page 2 of 43 Stanford's agents under Willis letterhead, and signed by a Willis executive, identifying the insurance policies issued from Lloyd's of London supposedly underlying SIB's operations. The letter proclaimed SIB's employees to be "first class business people," and claimed that SIB had undergone a "stringent Risk Management Review by an outside audit firm." 2. None of it was true. The investments had no meaningful insurance relative to the investors' CDs. The supposed independent auditor Defendants touted by Willis was a small Antiguan firm Stanford controlled. And, far from SIB being a legitimate company that could pass a real audit, SIB was a fraud that funneled deposits to Allen Stanford personally as supposed undocumented "loans," speculated in real estate, and made other risky investments. 3. Willis provided these letters to Stanford, and sometimes directly to investors, knowing the statements were false, or with severe recklessness as to the letters' veracity. Willis had every expectation investors would be relying on the letters in deciding to invest in what they believed were safe, insured high-yield CDs. Plaintiff Ram-ii was one such investor, and now he, and a class of similarly situated investors, have a right to recover from Willis. PARTIES 4. Plaintiff, REINALDO RANNI, is a citizen of Venezuela residing in Venezuela. Additionally, this case seeks certification of a class of predominantly Venezuelan and South American investors who were solicited to invest in CDs offered by Stanford International Bank Ltd. by financial advisors in the Miami office of Stanford Group Company, and who were shown and relied on letters prepared by Defendants. 2 HomERBoNNER 1200 Four Seasons Tower • 1441 Brickell Avenue • Miami, Florida 33131 Telephone: (305) 3 5 0-5100 Case 1:09-cv-22085-JAL Document 1 Entered on FLSD Docket 07/20/2009 Page 3 of 43 . i 5. Defendant Willis of Colorado Inc. is a corporation organized under the laws of Colorado and is a citizen of Colorado. Upon information and belief, Willis of Colorado is a wholly owned subsidiary and agent of Defendant Willis Group Holding Ltd. 6. Defendant Willis Group is a corporation organized under the laws of Bermuda, with its principal place of business in the United Kingdom. Willis Group is a publicly owned company that trades on the New York Stock Exchange under the symbol "WSH." Willis currently has a market capitalization of about $4.37 billion, with approximately 164 millions shares outstanding. Willis Group is the parent company and principal of Willis of Colorado, its agent. SUBJECT MATTER JURISDICTION 7. This Court has original jurisdiction over this proceeding under 29 U.S.C. § 1331 as this case arises under the laws of the United States, and supplemental jurisdiction under 28 U.S.C. § 1367(a). 8. This Court further has original jurisdiction over this proceeding pursuant to 28 U.S.C. §1332(d)(2)(B) because this is a class action in which the amount in controversy exceeds $5,000,000 exclusive of interest and cost and is a class in which members of the Plaintiff class are citizens and residents of a foreign state and at least one Defendant is a citizen of a state. PERSONAL JURISDICTION 9. This Court has personal jurisdiction over the non-residents Willis under 15 U.S.C. § 78aa. This Court further has personal jurisdiction under the Florida Long Arm Statute: § 48.193, Fla. Stat. Defendant Willis of Colorado committed a tortious act within the State of Florida, as described herein. Defendant Willis Group likewise committed a tortious act within 3 HOMER BONN ER 1200 Four Seasons Tower • 1441 Biickeli Avenue • Miami, Florida 33131 Telephone: (3 0 5 3 5 0-51 00 Case 1:09-cv-22085-JAL Document 1 Entered on FLSD Docket 07/20/2009 Page 4 of 43 the State of Florida or, alternatively, is subject to personal jurisdiction by the tortious actions of Willis of Colorado, its agent. Willis Group further has, both directly and via its subsidiaries, affiliates, and agents, operated, conducted, engaged in, or carried on a business or business venture in this state. Based on its general and specific contacts with the State of Florida, Willis Group has purposefully availed itself of the privilege of conducting activities within Florida and has established minimum contacts with the State of Florida under the Long Arm Statute. VENUE 10. Venue is appropriate in the Southern District of Florida pursuant to 28 U.S.C. 1391(b) as a substantial part of the events or omissions giving rise to the claim occurred in the District. FACTUAL BACKGROUND The Stanford Way 11. From at least about 1998 through February 2009, Allen Stanford, through companies he controlled, SIB and its affiliate Stanford Group Company ("SGC"), executed a massive Ponzi scheme through which they misappropriated billions of dollars of investor funds selling phony CDs under false assurances that the CDs were safe and insured. 12. It ended February 17, 2009, when the Securities Exchange Commission brought an action against Stanford, his agents, and the companies he ran, alleging multiple violations of federal securities laws. In the action, the SEC froze all of Stanford's assets and put them into receivership. 4 HOMERBOHNER 1209 Four Seasons Tower • 1441 Brickell Avenue • Miami, Florida 33131 Telephone: (305) 350-5100 , Case 1:09-cv-22085-JAL Document 1 Entered on FLSD Docket 07/20/2009 Page 5 of 43 13. Four months later, in June 2009, Stanford was indicted on 21 counts of fraud, conspiracy, and obstruction of justice. Now in custody, and having been denied bond, Stanford faces a maximum 250 years in prison.' 14. Allen Stanford had a checkered journey to prison. His first business was a chain of gyms in Texas, which went bankrupt in 1982. He declared personal bankruptcy in 1984 and got about $13 million in debts discharged. 15. In 1985, after a stint in the Cayman Islands where he supported himself as a scuba instructor, Stanford opened a bank on the island of Montserrat, bringing along with him his college roommate James Davis. 16. As the editor of OffshoreAlert, a newsletter that covers offshore banking, described it in a July 2009 profile on Stanford in Vanity Fair, "The only reason you opened a bank in Montserrat was to commit fraud." Ex. A hereto. 17. Stanford built a bank on the island and opened offices in Miami and Houston. To attract depositors, Stanford placed ads in Latin American newspapers promising interest rates approximately two percentage point higher than American bank rates. 18. Stanford had a rehearsed explanation for the bank's supposed ability to pay higher interest rates: "It's only two points; our organization is very lean. We don't pay taxes in Montserrat." One staff member quoted Stanford as saying, "'It is unbelievable. People are so stupid, they will risk all their money, give it to someone they don't even know, for two points.' One day he grabbed the calculator on my desk, ran the numbers for two points on a million 1 ABC News, June 19, 2009, http://abcnews.go.com/B/otter/WallStreetistory?ict=7881721&page=1. 5 HomERBoNNER 1200 Four Seasons Tower • 1441 Bricked Avenue • Miami, Florida 33131 Telephone: (3 0 5) 3 50-5 1 00 Case 1:09-cv-22085-JAL Document 1 Entered on FLSD Docket 07/20/2009 Page 6 of 43 dollars: it was $20,000 a year. He said it was just unbelievable what people would do for just two points more." Ex. A hereto. 19. By 1989, Stanford's Montserrat bank claimed $55.5 million in accounts. By November 1990, it was $100 million. When an American computer programmer reported that bank deposits were transferring into Stanford's personal account, an investigation commenced led by Scotland Yard and the FBI. Evidence surfaced that Stanford was laundering money for Columbian drug lords. Montserrat revoked Stanford's license in May 1991. Stanford fled to Antigua and, in July 1995, the previously dormant volcano Soufriere Hills erupted, destroying two-thirds of Montserrat. 20.
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