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Note: Davis Livestock, Inc. (Seller), breeds and sells cattle and other animals to farms across the United States and the world. Seller was approached by Brandon Webb (Alleged Fraudster) who informed Seller that Royal Atlantic Holdings, LLC (Facilitator) had “secured a group of buyers of cattle” with delivery to be made to Izmir, Turkey. Alleged Fraudster requested that Seller finance the transaction and acquire the cattle while Facilitator agreed to (1) reimburse Seller for all expenses in providing the cattle; (2) pay a certain price for each animal; and (3) pay Seller in full prior to the cattle being shipped from the U.S. Although Alleged Fraudster previously represented that Facilitator had the resources to “cover all necessary costs and fees”, Seller had to advance quarantine costs for the livestock or risk that they would not be processed in time for shipment. Additionally, Facilitator boarded the cattle without paying Seller as well as without having secured buyers in Turkey. Once the cattle were in transit to Turkey, Seller was promised that “all original bills of lading required by the letters of credit had been released, except for the cash buyers”. Seller, however, neither received letters of credit nor payments from Alleged Fraudster or Facilitator.

When the cattle arrived in Turkey, several hundred could not be offloaded for lack of buyers. Moreover, Alleged Fraudster demanded that Seller “pay the shipping company an additional” USD 230,000 to transport the livestock to another Turkish port lest the cattle be discharged and slaughtered by the Turkish government. Seller paid the shipping company, ultimately expending over USD 4,900,000 in costs for the transaction. Subsequently, Baladna Dairy Farms (Third Party), based in Qatar, contacted Seller to purchase cattle. Seller was previously promised by Alleged Fraudster to “share all profits on future deals with [Seller] until [Seller] was made whole for the Turkey transaction.” Accordingly, Seller informed Alleged Fraudster and Facilitator regarding the agreement with Third Party and “invited them to participate”. Subsequently, however, Seller learned that Alleged Fraudster had “misrepresented that they were acting for and on behalf of [Seller]” when executing an agreement with Third Party contrary to the original contract with Seller. Ultimately, the relationship deteriorated and Seller sued Alleged Fraudster and Facilitator. Anticipating that it would be unable to collect on a subsequent judgment based on its claims of breach of contract, fraud, conversion and quantum meruit, Seller filed for an ex parte writ of attachment regarding assets of Facilitator held by its bank. The United States District Court for the District of Utah, Jenkins, J., issued the writ.

The Judge noted that the writ was not meant to “hinder, delay, or defraud any creditor” of Alleged Fraudster or Facilitator; that there was a “substantial likelihood” that Seller would prevail on its underlying claims; and that Seller showed probable cause that it would “lose its ability to recover any damages” absent issuance of the writ. The prejudgment writ applied to all “cash, security documents, letters of credit, and other financial instruments held by or in the name of [Facilitator]” at multiple US branches of its bank.

[MJK]

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