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Saturday, December 7, 2019

Kazakh businessmen lose case after docs found to be forgeries; Defense attorneys say the two are abusing U.S. court system

By Jessica Karmasek | Aug 17, 2015


WASHINGTON (Legal Newsline) - Last month, a federal appeals court dismissed a lawsuit brought by two Kazakh businessmen who were using forged documents while claiming the daughter of the President of Kazakhstan extorted millions of dollars of their business assets with the help of a leading American economist and his D.C.-based business.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit, in a July 31 ruling, sided with the economist, Alexander Mirtchev, and Krull Corporation.

Mirtchev is a senior scholar, founding council member of the Kissinger Institute on China and the United States at the Woodrow Wilson Center; vice president of the Royal United Services Institute for Defence and Security Studies, London; and board director and executive committee member of the Atlantic Council of the United States.

He also is the president and founder of Krull, a global strategic solutions provider. According to its website, the company assists organizations facing “complex issues relating to shifting business models and uncertain policies in dynamic markets.”

The D.C. Circuit affirmed the U.S. District Court for the District of Columbia’s dismissal of the complaint, filed by Devincci Hourani and his brother Issam Hourani. The businessmen previously owned oil, broadcasting and publishing companies in the Republic of Kazakhstan.

The defendants’ attorneys, with law firms Bracewell & Giuliani LLP and Sale & Quinn PC, said in a statement they are “pleased” with the D.C. Circuit’s ruling.

“This is the latest in three consecutive rebukes of the Houranis’ attempts to abuse U.S. courts by filing malicious complaints,” the firms said.

“These complaints were part of the failed legal harassment, PR and lobbying campaign formerly led by the Houranis’ relative, the late former Kazakhstan KGB (now KNB) Major General Rakhat Aliyev, who was the source of the fabricated documents that were the foundation of the case, the negative PR information, and the campaign.”

One of the documents the Houranis initially filed with the district court was a letter from Ashkat Daulbaev, the deputy prosecutor general of Kazakhstan, to the Kazakh ambassador to the United States.

The letter identified Mirtchev as responsible for the campaign of “intimidation and expropriation against the Houranis.”

However, Mirtchev and Krull challenged the Daulbaev letter and other documents as forgeries and moved to dismiss the complaint.

The defendants submitted a letter from the Kazakh chief of staff that said another document was a forgery.

“The office of Head of Presidential Administration is written incorrectly, namely, the word 'administration' is written with a small 'a', which could never be allowed,” Makhmud Bazarkulovich Kasymbekov wrote.

The defendants had sent the documents to counsel for the Republic of Kazakhstan to determine their authenticity. They later asked for the plaintiffs to be sanctioned.

“(T)his abuse of the judicial process raises such obvious and pernicious threats to the functioning of our judicial system,” they wrote. “Filing forged documents has been deemed a fraud on the court.”

Ultimately, the plaintiffs withdrew the documents, and Judge Thomas Hogan allowed them to amend their complaint. Hogan also denied the motion for sanctions as moot.

At issue was whether the complaint alleged sufficient domestic misconduct by Mirtchev and Krull to state a claim under the Racketeer Influenced and Corrupt Organizations Act, the Hobbs Act or District of Columbia defamation law.

The district court dismissed the complaint for failure to state a claim, and the D.C. Circuit affirmed.

“The Houranis do not contend that their complaint states a claim of domestic Hobbs Act extortion by Mirtchev or anyone else. Nor do they assert that the actual extortion of their assets in Kazakhstan was itself in any way a violation of the Hobbs Act,” the panel wrote in its 28-page ruling.

“They argue only that Mirtchev’s agreement in D.C. to Dariga Nazarbayeva’s extraterritorial, non-Hobbs-Act extortion scheme in Kazakhstan constituted a conspiracy in the United States to violate the Hobbs Act.”

Also dismissed were claims for money laundering and defamation.

“With no injury from the money laundering, and no cognizable Hobbs Act claim to supply the missing injury either, the Houranis have no injurious predicate acts at all, let alone a pattern of them,” the D.C. Circuit wrote.

“The wheels have completely come off of the Houranis’ civil RICO claim.”

As to the defamation charges, the Houranis alleged that Mirtchev “published or caused to be published” a series of defamatory statements against them, including allegations -- as paraphrased in the complaint -- that they 1.) were members and supporters of the terrorist group Hamas, 2.) imported workers into Kazakhstan who were “trained in Islamic terrorist camps,” 3.) committed assault and 4.) owned an apartment in which a woman was falsely imprisoned and later murdered.

Those statements allegedly appeared on the website of the Kazakh Embassy in the United States “with the active support of the Kazakh ambassador,” in internal Kazakh government memoranda, in a document known as the “Aliyev Dossier” produced by the “Eurasian Transition Group,” in an editorial on and in “various other Internet publications.”

However, as the D.C. Circuit noted in its opinion, apart from alleging that the Embassy statements were published “on December 18, 2008” and that the other statements were published some time “in 2008,” the complaint does not provide any further detail on when or where the statements appeared or their actual content.

“There simply is no basis for finding that the statements were defamatory for purposes of Mirtchev’s and Krull Corporation’s liability without also finding that they were defamatory when coming out of the Kazakhstan government’s mouth,” the panel wrote.

Indeed, as attorneys for Mirtchev and Krull argued in a brief to the D.C. Circuit ahead of the ruling, the situation is unusual.

“To resolve plaintiffs’ claim, a U.S. court would have to ‘sit in judgment on the acts of the government of another,’” the defendants’ attorneys wrote in a July 20 brief.

John Quinn of Sale & Quinn, who served as co-counsel on the case, said Friday the plaintiffs' claims in this case should not have been filed in any court and “certainly had no business before U.S. courts where they have now been rebuked three times.”

“The only ‘factual’ support for any claim against defendants was fabricated documents generated by General [Rakhat] Aliyev that were proven to be forgeries by world class experts, including renowned document examiner Gideon Epstein who characterized plaintiffs’ evidence as cut and paste forgeries,” Quinn said.

“This case was part of a broader effort to support the political agenda of the plaintiffs’ relative, the late Gen. Rakhat Aliyev, former head of Kazakhstan’s KNB (formerly KGB) to bully and intimidate anyone perceived to oppose that agenda.”

According to court documents, trouble started brewing for the Houranis in June 2007, when armed agents of the KNB -- the Kazakh offshoot of the KGB -- raided the Hourani family’s offices.

In the following weeks, “pressure from various authorities mounted,” allegedly under the direction of Dariga Nazarbayeva, daughter of Kazakhstan’s President, Nursultan Nazarbayev.

According to court documents, Devincci met with Dariga in July 2007 and she then offered to use her influence with the government to try to “protect” his family’s businesses from further harassment if he would sign over his family’s shares in the mass media companies in which they held interests.

Devincci, who believed he had no choice in the matter, signed the paperwork to turn over his, Issam’s and Issam’s wife’s shares in KTK Television and Alma Media Conglomerate -- the largest media holding company in Kazakhstan -- to Dariga for her use.

In an amended complaint, though, Devincci allegedly signed over the shares to the “First Presidential Fund.” It is not explained what the fund is or whether Dariga controls it.

The complaint further alleges that Dariga sought the assistance of the defendants, Mirtchev and his consulting firm, Krull.

According to court documents, Dariga’s plan to amass control of Kazakh media was alleged to be “consistent with” Mirtchev’s earlier recommendation to President Nazarbayev, made in a memorandum informally known as the “Superkhan” document. Mirtchev allegedly had counseled the President on how he could consolidate power for himself and his family at the expense of business leaders.

Bracewell attorneys working on the case included partners Richard W. Beckler, Mark K. Lewis and Jeffrey L. Oldham, and associates Britt Cass Steckman, Jennifer T. Lias, Brittany M. Pemberton and Caitlin Tweed.

Steve Sale of Sale & Quinn and G. Robert Blakey also served as co-counsel.

Jeff Lamken of MoloLamken LLP argued the case in the D.C. Circuit.

From Legal Newsline: Reach Jessica Karmasek by email at

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