Case 1:04-cv-01198-RBW Document 1 Filed 07/15/2004 Page 1 of 35
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
MILAN JANKOVIC also known as PHILIP ZEPTER, Civil Action No. ______
Address: Ruelle Saint Jean, Villa Saint Jean 3
Monaco
FIELDPOINT B.V., and
Address: Leidseplein 29, NL-1017 PS AMSTERDAM Netherlands
UNITED BUSINESS ACTIVITIES HOLDING A.G.,
Address: Silileggstrasse 23, Wollerau, Switzerland
Plaintiffs, vs.
INTERNATIONAL CRISIS GROUP, a non-profit organization, JAMES LYON, an individual, and Does 1 through 10,
Address: 1629 K Street NW, Suite 450 Washington D.C., 20006
Defendants.
COMPLAINT
Plaintiffs Fieldpoint B.V. (“Fieldpoint”), United Business Activities Holding AG (“UBA”) and Milan Jankovic a/k/a Philip Zepter (collectively, “Plaintiffs”), against Defendants International Crisis Group (“ICG”), James Lyon, and Does 1 through 10 (collectively, “Defendants”), allege and complain as follows:
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I. NATURE OF THE ACTION 1. Plaintiffs Fieldpoint, UBA, and their affiliated business entities (collectively, the “Zepter Group”) are manufacturers, distributors and retailers of a wide range of consumer products, including, among other things, cookware, beauty products, home furnishings and fashion accessories. Plaintiffs also conduct business in the banking, insurance, telecommunications and mobile phone technology industries. Plaintiff Milan Jankovic a/k/a Philip Zepter (“Mr. Zepter”) founded the Zepter Group in 1986. The Zepter Group conducts business in more than fifty countries throughout the world. 2. This action arises out of Defendants ICG’s and James Lyons’ dissemination of knowingly false statements about Plaintiffs in a variety of national and international media as well as on the Internet. To wit, Defendants falsely depict the Zepter Group (including Mr. Zepter personally) as a criminal enterprise engaged in, among other things, money laundering and weapons trading. Defendants further falsely contend that Mr. Zepter directs these alleged criminal activities. Defendants statements were intended to, and were in fact, read by many in the Balkans and millions of people worldwide, including potential business partners of Plaintiffs, governments and policy makers, and existing and prospective purchasers of the Zepter Group’s products. 3. Defendant Lyon, purportedly a full time ICG employee, has been engaged in a series of businesses in the Balkans, and is believed to have aligned himself with local Balkan business competitors of Plaintiffs. ICG knew or should have known of the activities Defendant Lyon took against Plaintiffs and did nothing to restrain him. 4. Defendants’ statements about Plaintiffs and their alleged criminal activities are untrue and were made with knowledge of falsity or with reckless disregard to the truth of such statements. Defendants wrote and published, and intended for republication, the statements with malice and a conscious disregard for the truth for the purpose of furthering Defendants’ own agenda of preserving their influence and securing material business and economic advantage.
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5. Defendants’ broad dissemination of defamatory statements about Plaintiffs has caused severe economic, competitive and reputational harm to Plaintiffs. The success of each of the Plaintiffs, and the Zepter Group as a whole, worldwide and especially in Eastern Europe and in the Balkan Region, derives from their common use of the “Zepter” name and trademark. Plaintiffs have experienced the termination of various existing and prospective business deals. Further, Plaintiffs current and prospective business partners have expressed reluctance to engage in business with Plaintiffs in light of the false portrayal of Plaintiffs’ “criminal” role in the Balkan Region as depicted by Defendants. Additionally, Mr. Zepter personally has suffered humiliation and embarrassment as a result of the dissemination of the false statements by Defendants. II. JURISDICTION AND VENUE 6. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. Section 1332, as a result of the diversity of the parties, and pursuant to the Court’s supplemental jurisdiction under 28 U.S.C. Section 1367(a). The amount in controversy is in excess of $75,000.00, exclusive of interest and costs. 7. Venue is proper in this judicial district pursuant to 28 U.S.C. Section 1391(a) because a substantial part of the relevant events occurred in this district. III. THE PARTIES 8. At all times mentioned herein, Mr. Zepter is and was a citizen of Serbia and Montenegro, domiciled in the Republic of Monaco. 9. At all times mentioned herein, Plaintiff Fieldpoint is and was a foreign company organized and existing under the laws of Netherlands. 10. At all times mentioned herein, Plaintiff UBA is and was a foreign company organized and existing under the laws of Switzerland. 11. Plaintiffs are informed and believe, and on that basis allege, that at all times
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mentioned herein, defendant International Crisis Group (“ICG Belgium” or “ICG U.S.”) is and was a non-profit organization organized and existing under the laws of the District of Columbia. Among other locations, ICG has offices in both Washington D.C. and New York. Contrary to ICG’s website, it has in a prior action (discussed infra at Section VI) recently represented to a Belgian Court that its headquarters in Brussels is merely used for performing administrative tasks, and that the acts complained of in this Complaint were committed by ICG U.S. in Washington, D.C. 12. Plaintiffs are informed and believe, and on that basis allege that, at all times mentioned herein, Defendant James Lyon was an individual residing in Belgrade, Serbia and Montenegro (“Serbia”) and Provo, Utah. Plaintiffs are also informed and believe, and on that basis allege, that at least since 1996, Mr. Lyon has spent significant periods of time in the Balkan Region, including but not limited to Serbia and Bosnia and Herzegovina (“Bosnia”). Upon information and belief, Mr. Lyon has been employed by ICG since at least 1999, and in this capacity he participates in the work of ICG’s offices in this jurisdiction and regularly travels to and works in and from Washington D.C. Most recently, in this jurisdiction, Mr. Lyon was served in D.C. with a discovery proceeding related to the present matter on May 20, 2004. 13. Plaintiffs do not know the true names and capacities of the employees of ICG and other third parties and therefore sue them herein as defendants Does 1 through 10, inclusive, and therefore sue these defendants by fictitious names. Plaintiffs will seek leave to amend this Complaint to allege the true names and capacities of Does 1 through 10, inclusive, when ascertained. Plaintiffs are informed and believe, and on that basis allege, that each of the fictitiously named defendants are liable to Plaintiffs for the wrongful conduct as alleged in this Complaint and that Plaintiffs’ claim against these fictitiously named defendants arose from such conduct. 14. Plaintiffs are informed and believe, and on that basis allege, that at all times herein mentioned Defendants are and were, the agents, partners and/or joint venturers of the remaining Defendants and are and were acting within the course and scope of that agency,
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partnership, and/or joint venture. Plaintiffs are further informed and believe, and based thereon allege, that the acts and conduct of each such Defendant alleged herein were known to, authorized by, and/or ratified by the other Defendants, and each of them. Plaintiffs are informed and believe, and on that basis allege, that at all times mentioned herein, each of the Defendants was the agent, employee representative, partner, subsidiary, affiliate, joint venturer or alter-ego of each of the other Defendants and, in doing the things herein alleged, was acting within the course and scope of such relationship and with the knowledge, authorization, consent and ratification of each of the other Defendants. IV. GENERAL ALLEGATIONS A. The Business Success of the Zepter Plaintiffs 15. Mr. Zepter founded his first company, Zepter International, in Austria in 1986. Over the years, Zepter International expanded into a network of related companies collectively known as the Zepter Group. The Zepter Group is now a global enterprise with sales through separate companies based in more than fifty countries on five continents across the world, and with a network of more than 2,500 regular employees, 100,000 sales consultants, eighty-nine shops and more than fifty pavilions located in major cities throughout the world. 16. The Zepter Group owns 562 trademarks, 286 patents and 357 protected designs all over the world. Plaintiff Fieldpoint owns the Zepter trademark, including the Zepter name and logo and all rights associated therewith (the “Zepter Trademark”). The Zepter Trademark is registered and protected in 76 countries on all continents and is licensed for use by a variety of companies associated with the manufacture and distribution of the Zepter product. As such, the Zepter Trademark represents a valuable asset, the protection of which is critical to the ongoing success of the Zepter Group’s businesses. 17. Since 1986, the Zepter Group companies have provided and continue to provide a wide range of products and services, including banking, insurance, telecommunications and retail sales of consumer products, including luxury accessories, cosmetics, medical products, home
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design, appliances and cookware. While the Zepter Group products are manufactured in seven factories located in Germany, Italy and Switzerland, the majority of the Zepter Group’s business is done in Eastern Europe. 18. In recent years, the Zepter Group has expanded into the Balkan countries, including Mr. Zepter’s native countries, Bosnia and Serbia. There are currently four Zepter Group companies operating in Bosnia and ten in Serbia, in which the Zepter Group have invested more than 70 million DM (in excess of $40 million). This expansion into the Balkans has apparently come in to business conflict (or is expected to conflict) with businesses which have aligned themselves with Defendant. 19. Mr. Zepter was born Milan Jankovic, but after customers and the public in general started referring to him as “Mr. Zepter,” he officially changed his name to identify with the trademark synonymous with his companies and the products and services they offer. 20. As a result of the Zepter Group’s success under Mr. Zepter’s direction, Mr. Zepter is a well-respected and prominent international businessman and investor. Mr. Zepter is a recipient of several international awards, including the Cavaliere Del Lavoro Della Repubblica Italiana, which was awarded to Mr. Zepter by the President of Italy for his outstanding services rendered to Italian industry and community in 1997, and the Golden Biatec Award, granted by the Economic Club, Bratislava, Slovakia in 2002. Mr. Zepter has never been prosecuted for or convicted of any crime. 21. At all times, the Zepter Group has conducted its business in compliance with all applicable laws and regulations. The Zepter Group, like Mr. Zepter, has received many international awards, including, among others: a. Golden Arch of Europe Award, awarded by BID Business Initiative Directions for quality and technology of products (2004); b. Four Golden Mercury awards, awarded to elite companies of the European economy for advancement in technology and new and original products, which were awarded to the Zepter Group as the leader in Italian industrial
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progress in 1994, 1995, 1996 and 1997; c. 30th Golden Award for Commercial Prestige (New Millennium Award) awarded in Madrid, Spain (2000); d. 14th International Europe Award for Quality, awarded by the Editorial Office and the Trade Leaders’ Club, Paris, France (2000); e. Gold Medal for Quality 2000 and 2001 at the International Fair “Nature and Man” (ECO), Novi Sad, Yugoslavia (2000, 2001); f. “European Friendship” international award for assistance to the creation of united, economic, cultured and information region in Europe, for extension of friendship of European nations awarded to Zepter International awarded by the Ukrainian Ecological Academy of Sciences (1998); g. Diploma of Acknowledgment for due fulfillment of tax liabilities during 2000, awarded by Kiev State Administration and State Tax Administration (July 2001); h. Special Award “Step in Future ECO,” Fair of Technology, Belgrade (2003); i. “Bank of the year 2002” granted to Zepter Bank by the Agricultural Chamber of Vojvodina, Serbia and Montenegro (2003); j. “14th International Europe Award for Quality 2000” awarded to Zepter Hungary by the Editorial Office and the Trade Leaders’ Club in Paris (2000); k. Several Certificates for quality assurance of the Zepter product Bioptron, the patented light medical therapy device designed to help in the treatment of wounds, scars and sores, bring relief from pain and contribute to the overall care of the skin awarded by internationally recognized Dekra, a service provider engaged in certifying safety and quality of various
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products (2001); and l. Declarations of conformity issued by the Swiss Association for Quality Management Systems (“SQS”), Switzerland and Dekra for the Zepter products (2001). 22. The Zepter Group also sponsors various sporting events, including, but not limited, to the Canadian National Hockey Teams, Arrows Formula One car racing team, the World Basketball Championships, and the Monte Carlo Tennis Open. 23. Since 2001, all Zepter Group companies, including its banks, have been audited by the accounting firm of Deloitte & Touche. Plaintiffs are informed and believe that Deloitte & Touche also audits Defendant ICG’s books and financial statements. 24. The Zepter Group banks have become recognized in the business world and by individual customers as successful and trustworthy financial institutions. By way of example only, Zepter Banka A.D. Beograd in Serbia, is confirmed by the British Standard Institution to handle its business according to the highest international banking standards. B. The ICG Defendants 25. ICG is a non-profit organization registered under laws of District of Columbia. Although according to its website ICG’s international headquarters are in Brussels and ICG holds itself as a single entity operating worldwide, ICG has recently represented to a Belgian Court that it is two distinct corporations: a Belgian corporation and a D.C. not-for-profit corporation, both with identical names. It operates on five continents and maintains offices in Washington, D.C., New York and Moscow. Upon information and belief, either ICG or ICG U.S, also has a media liaison office in London and twelve field offices, including four in the Balkans (Belgrade and Pristina in Serbia, Sarajevo in Bosnia and Skopje in Macedonia). 26. According to its website, ICG is funded by governments, charitable foundations, companies and individual donors, representing some of the wealthiest and most influential persons and companies in the United States and throughout the world, including the Open Society Institute, the Bill & Melinda Gates Foundation, the Atlantic Philanthropies, and others.
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Many ICG supporters receive private policy briefings by visiting experts from ICG field offices, have direct access to staff and analysts, are invited to roundtable dinner discussions, fund-raising and promotional events and field trips and are sent all ICG publications. 27. Plaintiffs are informed and believe, and on that basis allege, that ICG’s operations are overseen by a Board on which sit many prominent politicians, diplomats, businesspersons and media members who, according to ICG, are directly involved in ICG’s work, including preparation and approval of ICG’s Reports and Publications. ICG also has an International Advisory Board allegedly comprised of key individual and corporate contributors, who as members of the Board participate in preparation and approval of ICG’s Reports and Publications. Plaintiffs are informed and believe, and on that basis allege, that these members of the ICG Board and Advisory Board are all citizens of the United States. 28. Plaintiffs are informed and believe, and on that basis allege, that ICG is a non- governmental organization and, as such, is not to be engaged in commercial activities. According to ICG’s proclamations, it works “through field-based analysis and high-level advocacy.” Its mission is to prevent and resolve conflict in countries “at risk of outbreak, escalation or recurrence of violent conflict” through “field-based analysis and advocacy.” ICG further claims that this work is performed by “field analysts are former diplomats, journalists, academics and NGO staff who are often leading experts in their fields.” 29. Notwithstanding such proclamations, Plaintiffs are informed and believe, and thereon allege, that the ICG representatives in local offices, employees, field analysts and regional program directors, including but not limited to those in Balkans, also engage in a variety of commercial and political activities and use their position with ICG for their personal benefit and for the benefit of those associated with them. Plaintiffs are further informed and believe, and based thereon allege, that ICG knows or reasonably should have known about these commercial activities by its representatives. 30. ICG produces “regular analytical reports containing practical recommendations targeted at key international decision-makers” (the “Reports”) as well as newsletters, briefing
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papers and other publications (collectively, the “Publications”). According to ICG, the Reports and Publications are a result of its work with “governments and those who influence them, including the media” and their purpose is to “highlight crisis and generate support for its policy prescriptions.” The Reports and Publications are distributed widely by email and printed copy to officials in foreign ministries and international organizations and are made generally available worldwide via the Internet on the ICG website. The Reports and Publications are available in English but “translations of its reports into relevant languages” are also available. 31. Plaintiffs are informed and believe, and on that basis allege, that the Reports and Publications have a significant influence on policy makers, local and international governments and international organizations, businesses and media. 32. ICG’s Reports and Publications are not limited to addressing the political and social aspects of the particular countries or regions, but instead focus on the economic aspects of such countries or regions. Plaintiffs are informed and believe, and based thereon allege, that ICG, contrary to its own policies and proclamations, interjects itself into and materially affects the capital and commercial structures of the particular country or a region in support of the personal business interests benefitting its representatives, employees and agents. 33. ICG’s Reports and Publications reflect that they were created, authored, and/or prepared by ICG and that ICG is the copyright owner of such materials. Additionally, ICG freely encourages copying and distribution of the material on the ICG website, including the Reports and Publications. 34. Plaintiffs are informed and believe, and on that basis allege, that ICG’s distribution chain is extensive. Plaintiffs are further informed and believe, and on that basis allege, that in 2003 ICG disseminated its Reports and Publications in the following three ways: (a) by direct mail of printed reports and papers to more than 4,000 senior policy makers and other influential persons; (b) by email notification or attachment of reports and papers to 12,400 targeted “influentials” and to another 14,000 recipients subscribing through the ICG website; and (c) on the ICG website, www.crisisweb.org.
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35. In 2002, ICG opened an advocacy office in New York that is responsible for “advocacy with the UN Secretariat, diplomatic corps and media, liaison with the philanthropic community, and policy input.” ICG’s Washington office is responsible for “advocacy with the Administration, Capitol Hill, and U.S. media, and policy input to Brussels and the field.” ICG also opened a media liaison office in London in 2002. ICG’s opening of a new liaison office in Moscow in 2003 was expected to “complete the expansion” of ICG’s advocacy presence. 36. ICG has been operating in the Balkans since 1996, currently maintaining a field based presence in Sarajevo, Belgrade, Pristina and Skopje and “a watching brief” over Albania, Montenegro and Croatia. Plaintiffs are informed and believe, and based thereon allege, that the ICG Balkans Program is historically the most expensive of all ICG projects, with the allocated budget of $1.62 million in 2001, followed by the ICG Central African Project which received $1.2 million. 37. Plaintiffs are informed and believe, and based thereon allege, ICG has incorporated in its Reports and Publications certain false and erroneous material and inaccurate conclusions about Plaintiffs, among others, in order to maintain the interest of its donors in its activities in the Balkans. In issuing these knowingly false Reports relating to the Balkans, ICG was motivated by its own political and economic agendas including its fundraising activities. 38. Mr. Lyon has been employed by ICG since August 1999. Since October 2000, he has served as ICG’s “main investigator and Project Director for the Balkans” and “the Director of ICG Serbia.” Beginning in 1995, before and during his employment with ICG, Mr. Lyon also worked in Bosnia as a consultant to numerous foreign and local companies and international governmental organizations and their subcontractors, and operated several businesses in that region in pursuit of his own business interests. Plaintiffs are informed and believe that Mr. Lyon’s commercial activities at all times alleged herein were known to ICG, and ICG did nothing to restrain Mr. Lyon. More specifically, ICG had knowledge that Mr. Lyon had worked, for personal gain, as an advisor to several foreign and regional companies and international governmental organizations and their subcontractors, in the course of which Mr. Lyon apparently
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became associated with direct and potential competitors of the Plaintiffs. 39. Mr. Lyon’s duties and responsibilities as the Director of ICG Bosnia between August 1999 and October 2000, and as the Director of ICG Serbia since October 2000, include, among others, a duty to implement and manage all projects undertaken by ICG’s office, to direct the project’s advocacy effort and staff, and to establish and maintain good working relations with the international community and others in the country. Additionally, Mr. Lyon is responsible for recruitment and management of ICG staff; advocacy of recommendations developed by the project staff; media relations; financial controls; providing financial, administrative and political reports to donors and Board members; and preparation and follow-up on funding proposals to foundations, international organizations, and governments. Mr. Lyon is also responsible for the creation, production, distribution, supervision and/or approval of ICG’s Reports, Publications, press releases and policy statements, including certain ICG Reports containing defamatory statements about Plaintiffs. 40. Plaintiffs are informed and believe, and on that basis allege, that Mr. Lyon has admitted his engagement in business activities in the Balkans in, among other things, documents he submitted in support of his application for a temporary visa in Serbia and Montenegro in at least three different years, including 2001, 2002 and 2003. 41. According to a July 2003 article entitled “Mr. Percentage” in a Belgrade weekly called “Nedeljni Telegraf,” Mr. Lyon has been very active in his personal business activities in the Balkan Region, which are potentially competitive with Plaintiffs’ business activities. The article reports that in Bosnia, Mr. Lyon was involved in exporting lumber and importing sugar and tobacco and had close relations with Jasenko Lolic of Genex Trading in Bosnia, the main importer of cigarettes from a Croatian tobacco factory, as well as doing business with an oil refinery in Bosanski Brod. 42. Mr. Lyon is also reported to have lobbied the Yugoslavian Military Historic Archives to have officers trained by a private U.S. company, then sought a percentage of the proceeds. Mr. Lyon is also reported to have tried influencing the privatization of the local
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newspaper production plant called Matroz, and selling the private Serbian entertainment TV station “Pink” to Paramount Pictures. Mr. Lyon was further reported to have earned money by leveraging his ties to the former Yugoslav Army Chief of Staff, Nebojsa Pavkovic, and to a local company, “Intercom,” a main supplier of medical materials to Belgrade’s military medical hospital. 43. Additionally, the article reports that Mr. Lyon was involved in business dealings with associates of Bora Milosevic, a brother of Slobodan Miloslevic (Former Serbian dictator now on trial by the International Court in Hague, Holland for war crimes and atrocities in connection with wars in the Blakans). The article also reports that during the late 1990's Mr. Lyon was protected by the then Bosnian security service, the Agency for Reports and Documents. 44. Plaintiffs are informed and believe, and on that basis allege, that Mr. Lyon was interviewed for various newspapers, magazines, television shows and other public events, during which he repeated false and defamatory statements about Plaintiffs comparable to those contained in the ICG Reports at issue in this case. V. DEFAMATORY STATEMENTS BY ICG A. Report No. 141 45. On or about March 18, 2003, ICG printed, published, circulated and distributed its Report No.141, entitled “Serbia After Djindjic” (Report No. 141, Exhibit A). According to ICG, Report No. 141 “analyzed the political situation that had led to the assassination [of Serbian Prime Minister Zoran Djindjic].” Report No. 141 remains available to the public on ICG’s website at http://www.crisisweb.org/home/index.cfm?id=1715&l=1. 46. Plaintiffs are informed and believe, and on that basis allege, that Report No. 141 was authored in whole or in part by Mr. Lyon who, as a Director of ICG Serbia, was also responsible for its publication. Plaintiffs are further informed and believe, and on that basis allege, that on or about March 18, 2003, ICG distributed Report No. 141 worldwide by mail and
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at the same time made it available worldwide on the ICG website. 47. Report No. 141 contains false statements about Plaintiffs. For example, Report No. 141 falsely states: The March 2003 SFOR raids on the offices of several RS officials and businessmen, as well as the subsequent shutdown of their businesses and bank accounts, were designed to restrict this flow. Of particular concern is the fact that the Milosevic-era “businessmen” affiliated with Serbian State Security and mentioned earlier in this report, appear to control much of Republika Srpska’s revenue flows through the Ministry of Finance, and have excessive influence over the office of the Premier. Another company that allegedly provides cover for money laundering and weapons shipments is the Zepter Group, owned by Milan Jankovic (a.k.a. Filip Zepter.) [Footnote omitted.] Milan Jankovic was a close personal friend of Zoran Djindjic, and the pair spent time together on holidays. The Belgrade media has reported that Jankovic is directly financing the Serbian Government’s lobbying efforts in the United States. [The omitted footnote references a news article from the local paper that served as a source of this information.] Exhibit A, p. 15. 48. The descriptions in Report No. 141 of Mr. Zepter and the Zepter Group as “cover for money laundering and weapons shipments” and the statement that Mr. Zepter was directly financing the Serbian government lobbying effort in the United States are false. 49. Report No. 141 attributes the source of these defamatory fabrications as “ICG interviews of various anonymous sources,” an “OHR report in ICG possession about Zepter,” as well as local media. (See Exhibit A, pp. 15-17). The OHR report cited as a source of this false information about Plaintiffs appears to be an undated report (the “AFD Report”) bearing letterhead identifying its source as the Anti Fraud Department (the “AFD”) of the Office of the High Commissioner (the “OHR”). The OHR was formed pursuant to Annex 10, Article II of the Dayton Peace Agreement for the purposes of overseeing implementation of the civilian aspects of the Dayton Agreement on behalf of the international community in Bosnia and Herzegovina.
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The AFD Report is clearly labeled “For Intelligence Purposes Only Not for Court Use” at the top and at the bottom of each page. It also states that “[t]he AFD presents the information below for your use. Furthermore, the AFD remain available to assist any national agency with any assistance required within B-H [Bosnia and Herzegovina.]” (Exhibit A, p. 2.) Report No. 141, however, does not mention in any manner that the AFD Report is actually clearly labeled “For Intelligence Purposes Only Not for Court Use” at the top and at the bottom of each page. 50. Additionally, the AFD Report incorporates another bogus document dated September 1, 2003, about Mr. Zepter and the Zepter Group, which purports to have been prepared and signed by Charles Briefel, Acting Director of Human Rights Department of the Organization for Security and Cooperation in Europe (OSCE) and Bill Potter of the OHR and sent to the Government of Republika Srpska, Bosnia and Herzegovina (the “Letter to RS Government”). The Letter to RS Government states that “[b]ased on the independent investigation of OHR in Bosnia and Herzegovina, as well as the information we obtained from the non-government organization International Crisis Group, we came across information regarding a criminal group led by Milan Jankovic / Filip Cepter.” The Letter to RS Government also directs the Government of Republika Srpska to inform “all appropriate persons at Serbia and Montenegro” and to “undertake the appropriate activities.” In response to an inquiry by Plaintiffs, Mr. Briefel has indicated that the Letter to RS Government is not an authentic document. 51. Defendants’ false statements about Plaintiffs in Report No. 141 were understood by the average public to mean that Mr. Zepter and the Zepter Group are criminals, involved in criminal activities, including money laundering, weapons trading, and making illegal political contributions. As such, the statements are defamatory per se. 52. There is no truth to the defamatory statements regarding Plaintiffs in Report No. 141. Defendants knew or should have known that the statements were false at the time they were made and published. B. Report No. 145
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53. On or about July 17, 2003, ICG printed, published, circulated and distributed its Report No. 145, entitled “Serbian Reform Stalls Again” (Report No. 145, Exhibit B). According to ICG, Report No. 145 “analyzed the shortcomings of the government’s crackdown on the military/criminal network behind the shooting [of the Prime Minister Djindjic] and recommended stronger action on reform of the security services judiciary and media.” Report No. 145 indicates on the cover page and in the back that it was published in Belgrade, Serbia and Brussels, Belgium. Report No. 145 remains available to the public on ICG’s website at http://www.crisisweb.org/home/index.cfm?id=1719&l=1. 54. Plaintiffs are informed and believe, and on that basis allege, that Report No. 145 was also authored and published, in whole or in part, by Mr. Lyon. Plaintiffs are further informed and believe, and on that basis allege, that on or about July 17, 2003, ICG distributed the Report No. 145 worldwide by mail and at the same time made it available worldwide on the ICG website. 55. Like Report No. 141, Report No. 145 contains false and defamatory statements about Plaintiffs. For example, Report No. 145 alleges that Serbian state security (“BIA”) was involved in the weapons trade and other criminal activities and that it “maintains close ties” to the Zepter Bank: “The BIA as a whole is deeply compromised by criminal activities as well as numerous other illegal actions under Milosevic [former Serbian dictator now on trial by the International Court in Hague, Holland for war crimes and atrocities in connection with wars in Balkans]. It appears to have shadowy connections to at least two banks -- Komercijalna Banka and Kapital Banka -- and maintains close ties with a third, Zepter Banka. It has been involved in the weapons trade, through such front companies as Grmec. Its most dangerous component is the so-called military line, composed of former officers who transferred from the army in the early 1990s. Many of these are engaged in economic activities connected to some of the mentioned banks.” See Exhibit B, p. 15.
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56. This statement regarding Plaintiffs is also false. The Zepter Bank is an independent business entity, organized under laws of Serbia, that has no relationship whatsoever with the BIA. 57. Report No. 145 also falsely describes Mr. Zepter as the member of the “new Serbian oligarchy” that includes companies and individuals which have been on EU visa ban lists or whose assets were frozen in Europe or the U.S. Specifically, Report No. 145 falsely states: “The unwillingness to continue the crackdown reflects the power of the Milosevic-era financial structures that with the rigid oversight once provided by the dictator removed have transformed themselves into a new Serbian oligarchy that finances many of the leading political parties and has tremendous influence over government decisions. Some of the companies were originally formed as fronts by the State Security or Army Counterintelligence (KOS), while others operated at the direct pleasure of the ruling couple. Under Milosevic, many of these companies profited from special informal monopolies, as well as the use of privileged exchange rates. In return, many of them financed the regime and its parallel structures.
[¶] Some of the individuals and companies are well known to average Serbs: . . . Zepter (Milan Jankovic, aka Filip Zepter) . . . are but some of the most prominent. Because of the support they gave to Milosevic and the parallel structures that characterized his regime, many of these individuals or companies have at one time or another been on EU visa ban lists, while others have had their assets frozen in Europe or the US.
[¶] In the popular mind, they and their companies were associated with the Milosevic regime and benefited from it directly. The DOS campaign platform in September 2000 promised that crony companies and their owners would be forded to answer for past misdeeds. Few of the Milosevic crony companies have been subjected to legal action, however. The enforcement of the “extra-profit” law is often viewed as selective and there have been only a handful of instances in which back taxes, perhaps 65 million Euros worth, have been collected. Most disturbing is the public’s perception that at a time
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when the economy is worsening these companies’ positions of power, influence and access to public resources seem to have changed very little.” Exhibit B, pp. 17-18. 58. None of these statements about Plaintiffs are true. Mr. Zepter has never been on the visa ban list of the EU, the U.S., or any other country, nor have any of Mr. Zepter’s assets ever been frozen in Europe, the U.S., or any other country. Moreover, neither Mr. Zepter nor the Zepter Group have supported the Milosevic regime, nor have they “benefited from it directly.” 59. Report No. 145 further falsely states that Mr. Zepter “holds a key position of influence” within the cabinet of the Serbian Prime Minister, based on the fact that an advisor of the former Serbian Prime Minister was also a former employee of the Zepter Group. Although Mr. Zepter has made contributions to various political parties in the past, in Serbia and elsewhere, he has never held any position, let alone a “key position of influence,” within the cabinet of the Serbian Prime Minister or any other political body. 60. Report No. 145 again attributes its false and defamatory statements to “ICG interviews of various anonymous sources,” the local media, and an “OHR Anti Fraud Department Document on the Zepter corporations and their activities in ICG possession,” which appears to be the same AFD Report referenced above and that including the Letter to RS Government, whose authenticity, as discussed above, was denied by one of its alleged authors, Mr. Charles Briefel of the OSCE. (See Exhibit B, pp. 15, 17 & 18). Thus, ICG has again republished the allegations contained in the AFD Report in Report No. 145 without checking the accuracy of the alleged facts contained therein and without reporting that the AFD Report specifically stated that it was “For Intelligence Purposes Only” and “Not for Court Use.” 61. The false statements by Defendants in Report No. 145 about Plaintiffs reflected, and were understood by the average public to mean, that Mr. Zepter and the Zepter Group are criminals and that Mr. Zepter is black-listed and banned entrance to the countries of the EU, that his assets were frozen in Europe or the U.S., and who, due to his “key position of influence,” is responsible in some part for the political and social instability of Serbia. As such, the statements
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are defamatory per se. C. ICG’s Dissemination of Reports Nos. 141 and 145 62. Plaintiffs are informed and believe, and on that basis allege, that ICG and Mr. Lyon wrote and published, and intended for republishing, the defamatory statements in Report No. 141 and 145 without any actual evidence of Plaintiffs’ commission of the alleged crimes, without conducting any reasonable investigation into the harmful accusations, and without ever contacting Plaintiffs to even comment on the allegations. Therefore, when ICG and Mr. Lyon engaged in the circulation, publication, and dissemination of the defamatory statements, they knew or should have known that the statements were false and published such statements with a conscious disregard for the truth. 63. By virtue of the availability of Reports Nos. 141 and 145 on ICG’s website, the defamatory statements contained therein are available worldwide and are disseminated within seconds in response to any Internet user who searches using the name and trademark “Zepter.” Such dissemination continues to this day. 64. Plaintiffs are informed and believe, and based thereon allege, that ICG and Mr. Lyon intended the defamatory statements in Reports Nos. 141 and 145 to be read by the public worldwide. The Reports on the ICG website are available in English, as well as in Bosnian/Croatian/Serbian. Consequently, the defamatory statements have been and continue to be read by hundreds of thousands of people in the United States and in the areas in which Mr. Zepter resides and works, including, but not limited to, Monaco, Bosnia and Serbia, and in many of the seventy-six countries in the world where the Zepter Group conducts its businesses and where the Zepter Trademark is registered and protected. 65. Moreover, Reports Nos. 141 and 145, in full text or as excerpts, are also incorporated in and further disseminated through various other websites and publications. By way of example only, Report No. 141 was also available on the following Internet addresses: http://www.reliefweb.int/w/rwb.nsf/. This website is maintained by the ReliefWeb, a project of the United Nations Office for the Coordination of Humanitarian Affairs
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(OCHA); http://www.invgr.com/_yu/. This website is maintained by the Business and Investment World of Serbia and Montenegro; http://www.bosnia.org.uk/bosrep/default.cfm?reportid=157. This website is maintained by The Bosnian Institute, an international organization and a charity registered in the Great Britain that purports to provide education and information on the history and culture of Bosnia-Herzegovina, founded in July 1997 with a grant from the David and Lucile Packard Foundation; http://see.oneworld.net/article/archive/319. This website is maintained by the One World Partnership for Eastern Europe. The site claims it is “bringing together a network of people and groups working for human rights and sustainable development from across the globe;” http://www.weltpolitik.net/regionen/europa/serbien/1561.html; http://balkanfire.hypermart.net/yugoslavia/studies.htm. This website is maintained by the Balkan Connection magazine; and http://www.indopubs.com/ccco.html. This Web site is maintained by Indonesia Publications. 66. Similarly, the ICG Report No. 145 was available at the following Internet addresses: http://www.anem.org.yu/eng/medijska_scena/icg145.htm. This website is maintained by ANEM - Association of Independent Electronic Media, the association of radio and TV stations in Serbia and Montenegro, consisting of 32 news broadcast companies, including 28 radio and 16 TV stations; http://www.bosnia.org.uk/news/news_body.cfm?newsid=1785. This website is maintained by The Bosnian Institute; http://www.mail-archive.com/[email protected]/msg00533.html. This website appears to be maintained by an individual named Miroslav Antic;
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http://www.reliefweb.int/w/rwb.nsf. This website is maintained by ReliefWeb; http://www.medienhilfe.ch/News/2003/SER/ICG145_Media.htm. This website is maintained by Medienhilfe, a Swiss based non-government and non-profit organization which purports to support independent media and professional journalism in the area of the former Yugoslavia; http://cp.yahoo.net/search/cache?va=stalls&va_vt=any&vp=Serbian+reform&vp_vt= any&vst=0&vd=all&fl=0&ei=ISO-8859- 1&vm=p&n=20&url=PnSNas0zcCEJ:groups.yahoo.com/group/balkans/message/317 6. This website is maintained by Balkan Academic News; http://see.oneworld.net/article/archive/3260/60. This website is maintained by the One World Partnership for Eastern Europe; http://www.questjournalists.com/reconstruction.asp. This website is maintained by the Quest Media, which is a part of the Better World Fund, allegedly created with support from businessman and philanthropist R.E. Turner as part of his historic $1 billion gift to support UN causes; http://www.indopubs.com/ccco.html. This website is maintained by Indonesia Publications; http://cp.yaho.net/search/cache?va=stalls&va_vt=any&vp=Serbian+reform&vp_vt=a ny&vst=0&vd=all&fl=0&ei=ISO-8859- 1&vm=p&n=20&url=UDOkVqwPz_kJ:www.odbor.org.yu/arhiva. This website is maintained by the Human Rights Committee, City of Valjevo, Serbia. http://cp.yahoo.net/search/cache?va=stalls&va_vt=any&vp=Serbian+reform&vp_vt= any&vst=0&vd=all&fl=0&ei=ISO-8859- 1&vm=p&n=20&url=VfrsMXUGXbAJ:www.swisspeace.org/koff/c_southeasteurop e_general.htm. This website is maintained by the “Swiss Peace Foundation,” an organization that claims to promote independent peace research in Switzerland; http://www.erpic.org/pandi/policy/bbp/archive.htm. This website is maintained by
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The European Rim Policy and Investment Council (ERPIC), which purports to be a policy and investment think-tank that fosters economic development and job creation in the European Rim. D. Mr. Lyon’s Defamatory Email 67. Plaintiffs are informed and believe, and on that basis allege, that on or about June 10, 2003, Mr. Lyon disseminated via email an article from an unknown source concerning the situation in Serbia after the assassination of Serbian Prime Minister Djindjic (the “Article”). The Article criticized the political situation in Serbia and in particular, the alleged inability of the Serbian government to deal with “Milosovic era financial tycoons.” 68. Among other things, the Article falsely states that: “The level of influence of the Milosovic era tycoons on the Serbian government may be clearly seen in the presence of three key advisors to the Serbian Premier. These are chief of staff Nemanja Kolesar, who was an employee of the Delta Company; chief of the Bureau for Information Vladimir “Beba” Popovic, a close associate of Stanko Sabotic; and shadowy security advisor Zoran Janjusevic, a former Zepter (and State Security) employee. Delta was a front company for the ruling couple (Milosevic and his wife Mira Mackovic) that used plundered state assets to finance an economic empire in Serbia, Russia, and Cyprus. Both Subotic and Zepter operated as front companies for State Security, with Subotic smuggling cigarettes and Zepter smuggling weapons (to Al-Qaeda among others) and laundering money. All three companies served as financial pillars of the Milosevic regime. All three now have substantial influence over the Serbian government and have come into repeated conflict with the National Bank and Dinkic over suspicious money transfers.” (Lyon’s E-mail, Exhibit C). 69. None of these allegations in the Article about Mr. Zepter and the Zepter Group are true. Neither Mr. Zepter nor the Zepter Group ever operated as front companies for State Security, smuggled weapons to Al-Qaeda or anyone else, or laundered money. The Zepter Group never served as a financial pillar of the Milosevic regime, it does not have any influence over the Serbian government, and it has never made any suspicious money transfers. Indeed, any
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“suspicious money transfers” would have been revealed in the various private and governmental audits or investigations of Zepter Group companies. 70. Plaintiffs are informed and believe that Mr. Lyon disseminated the Article in the scope of his employment with ICG and in his capacity as the director and employee of ICG.
VI. THE BRUSSELS ACTION 71. In January 2004, Plaintiffs sued ICG (Belgium) and James Lyon in the Court of First Instance, Brussels, Belgium, in part basing their action on, and identifying the parties in accordance with, the representations set forth publicly on ICG’s website. Until recent representations to the contrary were made by ICG, Plaintiffs believed that Brussels was its headquarters and that the conduct that is the subject of this Complaint occurred there as is represented on the ICG’s website and in ICG’s publications: ICG’s website and ICG’s publications identify ICG as a single entity, as having its international headquarters in Brussels, Belgium and make no distinction nor provide any indication that there is more than one “ICG.” That Brussels action, Milan Jankovic (aka Philip Zepter) et al. v. International Crisis Group and James Lyon, Docket Number 04/5685, was also limited to the moral prejudice suffered on Belgian Territory, reserving the right of Plaintiffs to seek redress elsewhere if appropriate. 72. In responding initially, in Brussels, to the Brussels Action complaint, ICG for the first time represented that there were two ICG corporate entities, one in Brussels and another in the United States. Subsequently, in a pleading dated June 18, 2004, filed in support of a special proceeding brought by ICG Belgium in a Brussels court seeking to prevent Plaintiffs from proceeding with U.S. based discovery under 28 U.S.C. §1782, International Crisis Group identified itself as two organizations; first, an international non profit association under Belgian law registered under the Belgian Central Company databank under number 0462, 873, 310 with its registered office at 149 Avenue Louise, Brussels, Belgium; second, as a non profit
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corporation created under District of Columbia Law, also called International Crisis Group, with an office in Washington, D.C. and an office in New York. ICG Belgium was described as being based in Brussels for reasons of administration and internal management specific to the organization. ICG Belgium, it alleged then, does not participate in the drafting or distribution of the reports of ICG U.S. or in any other action of ICG U.S. James Lyon was represented to be an employee of ICG U.S., not ICG Belgium. Thus, in June 2004 ICG represented for the first time that all of the activities which appeared to be generated from its International Headquarters in Brussels, in fact came from ICG U.S., a D.C. non-profit organization. ICG Brussels was represented to have no responsibility at all for collecting the information needed for drafting reports, drafting such reports, and publishing and distributing them. ICG Belgium, it was alleged, currently has no employees and it exists solely to carry out administrative tasks. 73. Thus, it was not until on or shortly after June 18, 2004 that Plaintiffs discovered that ICG’s website stating that ICG’s international headquarters in Brussels was, at least insofar as the allegations in the complaint are concerned, incorrect and that contrary to published reports, the activities which are complained of here were the responsibility of ICG U.S., not ICG Belgium. VII. INJURY TO PLAINTIFFS 74. Plaintiffs are informed and believe, and on that basis allege, that Defendants, and each of them, jointly and individually, wrote, printed, published, circulated, and continue to make available on ICG and other websites, the defamatory statements for the purpose of, among other things, injuring Plaintiffs’ reputations, injuring and interfering with their businesses, and publicly embarrassing and humiliating Mr. Zepter. Defendants did so in furtherance of their agenda of preserving their influence internationally and locally in the Balkans and securing support of their donors and their own material and economic advantage. 75. Defendants’ widespread and continued dissemination of statements that Plaintiffs are guilty of criminal and immoral conduct has exposed Plaintiffs to contempt, ridicule and
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embarrassment, injury to their reputations and economic loss. 76. The impact of Defendants’ defamatory statements is particularly severe as a result of the fact that many readers of the ICG Reports are policymakers, captains of industry, businessmen or individuals employed in the corporate finance departments of banks and financial institutions worldwide. Some such individuals and entities have indicated a reluctance to enter into business transactions with Plaintiffs in response to Defendants’ false statements, which is devastating to the continued operations and growth of Plaintiffs’ business endeavors. 77. In fact, many of the Zepter Group’s bank accounts were unilaterally closed by local banks without notice and explanation, preventing the Zepter Group from conducting its businesses in several European countries. By way of example only and without limitation, all of the bank accounts held at Credit Fancier de Monaco (“CFM”) by the Zepter Group, its related companies, and those companies privately held by Mr. Zepter, were closed by CFM without notice or explanation after ten years of banking with CFM. All subsequent efforts by the Zepter Group and Mr. Zepter to open new accounts in Monaco were rejected. This had an extremely negative and harmful impact on Plaintiffs’ businesses because Monaco, where Mr. Zepter resides, also served at that time as the business and treasury center for the operations of the entire Zepter Group. Additionally, the Monegasque community is a small and very closely knit community in which mere rumors spread like wildfire. Mr. Zepter was treated in the local community as a social outcast until it became virtually impossible to conduct any business whatsoever. Mr. Zepter suffered severe anxiety, damage to peace of mind and emotional and even physical illness. As a result, Mr. Zepter was unable to work for several months and was unable to carry out any marketing or controlling activities of the Zepter Group. 78. On several occasions, representatives of the Zepter Group and Mr. Zepter personally were advised by potential business partners throughout the world, including in the U.S., that, in the course of their due diligence, they had read certain reports about Plaintiffs’ alleged involvement in money laundering and weapons smuggling which caused these potential business partners to refuse to enter into business relationships with the Plaintiffs. To date, these
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events have precluded the Zepter Group from extending the reach of its products and services into the U.S. and other areas. 79. Plaintiffs are informed and believe, and on that basis allege, that the aforesaid conduct by Defendants, and each of them, was undertaken with the specific intent to cause injury to Plaintiffs, and that such conduct was despicable and carried out with willful and conscious disregard of Plaintiffs’ rights and feelings and with ill-will, all of which constitutes “malice.” The foregoing conduct by Defendants, and each of them, was also intended to and did subject Plaintiffs to unjust hardship in conscious disregard of Plaintiffs’ rights and, as such, constituted “oppression.” As a direct and proximate result of Defendants’ actions, Plaintiffs’ reputations, which are vital for the continuing success of their business, have been severely damaged by Defendants’ conduct. By reason of such ill-will, malice and oppression, Plaintiffs are entitled to punitive or exemplary damages against Defendants, and each of them, in an amount sufficient to punish them and deter them from further similar conduct. VIII. CAUSES OF ACTION A. Count I – Libel 80. Plaintiffs reallege and incorporate by reference paragraphs 1 through 79 as if restated in full. 81. On March 18, 2003, with Report No. 141 (Exhibit A), on July 17, 2003, with Report No. 145 (Exhibit B), and on June 10, 2003, with Lyon’s email (Exhibit C) [“the reports”], and at all times after those dates, through the ICG website, through written correspondence with their membership, through ICG employees interactions with various government entities, businesses, and private citizens, and in their allowing other websites and entities to freely reprint their materials, the defendants and each of them, jointly or severally, formulated, printed, published, republished, intended for others to republish and circulated in the above manners the reports. 82. Each of the above statements contained in the reports are of and concerning
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Plaintiffs and were false, untrue, and defamatory, and the reports are libelous on their face because: a. The reports wrongfully accuse Plaintiffs, and were intended to wrongfully accuse Plaintiffs, of actions and statements that are false, defamatory, and damaging. The reports have injured the reputation of the entire Zepter Group, wholly and individually, and have damaged the Zepter name and logo worldwide. b. The reports clearly expose Plaintiffs to hatred, contempt, ridicule, and obloquy because they falsely accuse and depict Plaintiff Zepter, among other things, as a criminal and central member of a broader criminal network, who both personally and as a member of a group, trades in weapons, constructs private armies, illicitly finances political parties, bribes government officials, and otherwise obtains special and dubious favors from officials at the expense of the general public. 83. The Defendants, and each of them, jointly or separately, knew the reports as they apply to Plaintiffs to be false, and that the reports were intended by the defendants to convey false or defamatory statements about Plaintiffs. 84. The Defendants, and each of them, jointly or individually, wrote, printed, published and circulated, or caused to be written, printed, published and circulated, the libelous statements concerning Plaintiffs either with knowledge of the falsity of the statements or with reckless disregard for their truth. 85. The statements appearing in the reports were so understood by those who read them to have the defamatory meaning ascribed to them in this complaint and the defendants, and each of them, jointly or separately, intended the reports to be so understood and read by members of the ICG, visitors of the website, and all who read the reports due to there further third-party distribution, where permission for such further distribution was known and encouraged by the Defendants. 86. At the time the reports were publicly distributed throughout Serbia, Montenegro, the Republic of Monaco, the rest of Europe and the world, the Defendants, and each of them,
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jointly and separately, were in possession of evidence that would raise serious doubt about the truth of the statements made in reports. Nevertheless, the Defendants, and each of them, jointly and separately, without due regard for the truth, falsity, or malicious nature of the statements, formulated, published, and disseminated the reports. 87. At the time the reports were publicly distributed throughout Serbia, Montenegro, the Republic of Monaco, the rest of Europe and the world, the Defendants, and each of them, jointly and separately, failed to sufficiently investigate the truth of their statements. Thus, Defendants, each of them, lacked any substantial reason to believe in the truth of the allegations contained in the reports. 88. The defamatory statements were written and published with reckless disregard for the truth of the matter, and Defendants knew at the time the statements were formulated that they were false and injurious to Plaintiffs. The reports were intended by Defendants, and each of them, to directly injure Plaintiffs with respect to Plaintiffs’ reputation, character, and business. 89. Defendants, each of them, were also negligent in publishing the reports. With ordinary and reasonable care, Defendants would have realized, or could have discovered, that the statements pertaining to Plaintiffs were obviously false and grossly libelous, offensive and damaging to Plaintiffs. 90. As a legal result of the reports and the false statements, Plaintiffs have suffered loss of reputation, shame, and mortification, all to their general damages in a sum to be proved at trial, but in a sum in excess of $75 million. 91. The defamatory statements contained in the reports were not privileged in any manner. The statements were intended by Defendants, and each of them, to directly injure Plaintiffs with respect to their reputation, character, and business. 92. As a legal result of the intentional and malicious conduct of the Defendants, and each of them, jointly and separately, Plaintiffs have suffered damage to property, business, trade, profession and occupation, all to Plaintiffs’ special damage in a sum to be determined at time of trial.
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93. By engaging in the misconduct alleged above, the Defendants each engaged in unjust and deceitful conduct with the willful and conscious disregard for the rights of Plaintiffs. Defendants were aware of the probable dangerous consequences of their misconduct and willfully and deliberately failed to avoid those consequences, including subjecting Plaintiffs to cruel and unjust hardship, in conscious disregard of Plaintiffs’ rights. Thus, an award of exemplary and punitive damages is justified. B. Count II – Tortious Interference with Business Expectancy 94. Plaintiffs reallege and incorporate by reference paragraphs 1 through 95, as if restated in full. 95. On March 18, 2003, with Report No. 141 (Exhibit A), on July 17, 2003, with Report No. 145 (Exhibit B), and on June 10, 2003, with Lyon’s email (Exhibit C), and at all times after those dates, through the ICG website, through written correspondence with their membership, through ICG employees interactions with various government entities, businesses, and private citizens, and in their allowing other websites and entities to freely reprint their materials, the defendants, and each of them jointly or individually, without Plaintiffs’ consent, interfered with the normal business expectations of the plaintiff and his business by writing, printing, publishing, intending for others to republish and circulating the reports, which falsely depicted Plaintiff Zepter as a criminal and a central member of a broader criminal network, who both personally and as a member of a group, trades in weapons, constructs private armies, illicitly finances political parties, bribes government officials, and otherwise obtains special and dubious favors from officials at the expense of the general public. These reports both directly and through association with Plaintiffs damaged Plaintiffs’ business. 96. Efforts are being made to grow Plaintiffs’ business and new sales markets are essential to this growth. Entry into and success in these new markets relies heavily on the reputation of the business. The past growth of Plaintiffs’ business has been consistent and the loss of reputation has caused a loss of continued growth. 97. The information disseminated by Defendants, and each of them, jointly or
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separately, created an extremely damaging and entirely false reputation for Mr. Zepter and his business generally. The injuries to reputation extend to the entire Zepter Group and have damaged the Zepter name and logo worldwide. Not only did statements against the business hurt current sales and access to possible future sales, but also, as the leader of his business, remarks made about and injuries sustained by Mr. Zepter personally also affected the reputation of his business. The remarks were disseminated to a large number of people worldwide via their website, mailings, and general communications. The website alone, according to the information provided on the website, receives many visitors a day. 98. The Defendants, each of them, jointly or separately, were well aware of the nature of Plaintiffs’ business. They were fully aware of the damage to reputation that the formulation, publication, and dissemination would cause Plaintiffs and their business, and were fully aware of the importance this reputation had on the current and future sales and expansion of the business. 99. The Defendants, each of them, jointly and separately, intended to convey in their communications a calculatedly false and inaccurate impression of Plaintiffs’ business. The Defendants were fully aware of the damage that would be caused by falsely claiming that Plaintiff Zepter was a criminal and central member of a broader criminal network, who both personally and as a member of a group, trades in weapons, constructs private armies, illicitly finances political parties, bribes government officials, and otherwise obtains special and dubious favors from officials at the expense of the general public. In publishing the reports, the Defendants intended for such damage to occur, intentionally interfering with the current and future sales and growth of Plaintiffs’ business. 100. The formulation, publication, and public dissemination of the reports by the Defendants was done with actual malice in that it was done with all or some of Defendants’ knowledge of the reports’ falsity, or in reckless disregard of the truth. At all relevant times, all or some of the Defendants were aware, or should have been aware, of facts contrary to the Defendants’ malicious allegations. 101. The publicity created by Defendants, and each of them, was done with malice in
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that it was made either with knowledge of the falsity of the statements or in reckless disregard of the truth. The statements describing Plaintiffs’ actions, character and intention were calculated falsehoods. 102. Defendants, and each of them, were also negligent in publishing the reports. With ordinary and reasonable care, Defendants would have realized, or could have discovered, that the reports were obviously false and grossly libelous, offensive, and damaging to Plaintiffs. 103. As a legal result of the reports, Plaintiffs’ business has suffered a loss of current growth and business opportunities, a loss of future growth and business opportunities, and a loss of access to markets that otherwise would have been available, amounting to general damages in an amount to be proven at trial. 104. In making the disclosure described above, Defendants, and each of them, are guilty of unjust and deceitful conduct amounting to malice in that Defendants made the disclosure with a willful disregard for Plaintiffs’ ability, and the ability of their companies, to function free of illicit interference. Defendants’ acts in formulating, publishing, and disseminating the reports on the ICG website, through written correspondence with their membership, through ICG employees interactions with various government entities, businesses, and private citizens, and in their allowing other websites and entities to freely reprint their materials, were done with the knowledge by Defendants that these acts would cause Plaintiffs to lose sales, growth, reputation, and prestige. Defendants’ acts were therefore willful, wanton, intentional, and actually malicious, justifying the award of exemplary and punitive damages according to proof at trial. C. Count III – False Light Invasion of Privacy (Only as it applies to Plaintiff Zepter) 105. Plaintiffs reallege and incorporate by reference paragraphs 1 through 106, as if restated in full. 106. On March 18, 2003, with Report No. 141 (Exhibit A), on July 17, 2003, with Report No. 145 (Exhibit B), and on June 10, 2003, with Lyon’s email (Exhibit C), and at all
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times after those dates, through the ICG website, through written correspondence with their membership, through ICG employees interactions with various government entities, businesses, and private citizens, and in their allowing other websites and entities to freely reprint their materials, the Defendants, and each of them jointly or individually, without Plaintiff’s consent, invaded Plaintiff’s right to privacy by writing, printing, publishing, and circulating the reports, which falsely depicts Plaintiff Zepter as a criminal and central member of a broader criminal network, who both personally and as a member of a group, trades in weapons, constructs private armies, illicitly finances political parties, bribes government officials, and otherwise obtains special and dubious favors from officials at the expense of the general public. 107. The publications that invaded Plaintiff’s right to privacy have been marked Exhibits A, B and C and are attached to this complaint and incorporated by reference. 108. The disclosure by Defendants, and each of them, jointly and separately, created publicity in the sense of a public disclosure to a large number of people worldwide via their website, mailings, and general communications. The website alone, according to the information provided on the website, receives many visitors a day. 109. The publicity created by Defendants, and each of them, jointly or separately, placed Plaintiff in a false light in the public eye in that the reports were fabricated by Defendants, and each of them, and publicly conveyed, and was intended to convey, a calculatedly false and inaccurate impression of Plaintiff Zepter as a criminal and central member of a broader criminal network, who both personally and as a member of a group, trades in weapons, constructs private armies, illicitly finances political parties, bribes government officials, and otherwise obtains special and dubious favors from officials at the expense of the general public. 110. The publicity created by the reports were highly objectionable to Plaintiff, and would be to any person of ordinary sensibilities. The reports made Plaintiff the object of scorn and ridicule by many residents of the Republic of Monaco, where the Plaintiff Zepter resides, as well as people worldwide who are familiar with Mr. Zepter or the Zepter Group and their products. The reports were intended to and did directly injure the Plaintiff with respect to the
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Plaintiff’s right to be left alone, as well as the Plaintiff’s reputation, character, and business. 111. The formulation, publication, and public dissemination of the reports by the Defendants was done with actual malice in that it was done with all or some of Defendants’ knowledge of the reports’ falsity, or in reckless disregard of the truth. At all relevant times, all or some of the Defendants were aware, or should have been aware, of facts contrary to the Defendants’ malicious allegations. 112. The publicity created by Defendants, and each of them, was done with malice in that it was made either with knowledge of the falsity of the statements or in reckless disregard of the truth. The statements describing Plaintiff’s actions, character and intention were calculated falsehoods. 113. Defendants, and each of them, were also negligent in publishing the reports. With ordinary and reasonable care, Defendants would have realized, or could have discovered, that the reports were obviously false and grossly libelous, offensive, and damaging to Plaintiff. 114. As a legal result of the reports, Plaintiff Zepter has suffered a loss of social status, esteem, and acceptance, causing him to experience shame, severe emotional distress, and impairment of normal social functioning, all to his general damages in a sum not determined at this time, but in excess of $75 million. 115. As a further legal result of the above-mentioned disclosure, Plaintiff has suffered injury in his business, all to the Plaintiff’s special damage in an amount to be proven at trial. 116. In making the disclosure described above, Defendants, and each of them, are guilty of unjust and deceitful conduct amounting to oppression, fraud, or malice in that defendants made the disclosure with a willful disregard of plaintiff’s rights. Defendants’ acts in formulating, publishing, and disseminating the reports on the ICG website, through written correspondence with their membership, through ICG employees interactions with various government entities, businesses, and private citizens, and in their allowing other websites and entities to freely reprint their materials, were done with the knowledge by defendants that these acts would cause Plaintiff to suffer great humiliation, mental anguish, and injury. Defendants’
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acts were therefore willful, wanton, intentional, and actually malicious and oppressive, justifying the award of exemplary and punitive damages according to proof at trial. IX. DEMAND FOR JURY 1. Plaintiff demands a jury for all counts of relief.
WHEREFORE, Plaintiffs respectfully request that this Court enter judgment in favor of Plaintiffs and 1. Against Defendants jointly or severally for a sum in excess of $75 million, as and for compensatory damages, for the loss of reputation, shame, and mortification suffered by Plaintiffs and for the shame, severe emotional distress, and impairment of normal social functioning suffered by Plaintiff Zepter individually; 2. Against Defendants jointly or severally for a sum to be proven at trial, as and for compensatory damages, for the loss of current growth and business opportunities, a loss of future growth and business opportunities, a loss of access to markets that otherwise would have been available to Plaintiffs, and injury to the reputation of the entire Zepter Group, wholly and individually, damaging the Zepter name and logo worldwide; 3. Against Defendants jointly or severally for a sum to be shown at trial, as and for punitive and exemplary damages, sufficient to prevent Defendants from continuing their willful, wanton, intentional, and malicious behavior towards Plaintiffs; 4. Against Defendants for all other such relief as the Court deems just and proper.
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