[co-author: Archie Wilson, Jr.]

On April 1, 2022, the U.S. District Court for the District of Maryland granted in part and denied in part motions for summary judgment brought by lenders on claims against them for alleged participation in fraud by a borrower against a third party. Plaintiff Alia Al-Sabah, a member of the Kuwaiti royal family, filed the action alleging that a business partnership with Jean Agbodjogbe ended with Al-Sabah being defrauded of more than $7.8 million. Agbodjogbe allegedly used money that Al-Sabah wired for joint investments in a restaurant and property investments for personal gain, and then borrowed against the properties to receive substantial loans from Sharestates Investments, LLC and World Business Lenders, LLC (“WBL”). Al-Sabah brought the action against the lender defendants for “not follow[ing] [their] underwriting guidelines” and lending money to Agbodjogbe despite “numerous character concerns,” and being a “high fraud risk.” The court granted summary judgment to the defendants on most claims, including civil conspiracy, fraud by omission, constructive fraud, and negligence. But the court denied summary judgment to WBI on aiding and abetting and unjust enrichment claims.

The court concluded that there was not an express agreement or understanding between Agbodjogbe and either defendant to defraud plaintiff, and that Al-Sabah could not establish a duty owed to her by either of the defendants. The court noted that the decision to loan to Agbodjogbe may have been a “risky business proposition” but not a willful decision by Sharestates to ignore fraud. However, for WBL, “specific evidence” showed that they “investigate[d] sufficiently to develop suspicions” about Agbodjogbe’s actions. Emails and documents revealed that WBL had fraud, veracity, and character concerns. Moreover, WBL was aware Al-Sabah had filed a lis pendens on the Pikesville property and that someone at WBL Googled the term “N&A Kitchen LLC scam.” Since the evidence was able to create a genuine issue of material fact as to whether WBL chose to remain “willfully blind” to Agbodjogbe’s fraudulent activities, summary judgment was denied for WBL as to the unjust enrichment and aiding and abetting claims.

The case is Al-Sabah v. World Business Lenders, LLC, 18-cv-2958 (D. Md. Apr. 1, 2022). Al-Sabah is represented by Venable LLP. WBI is represented by Troutman Pepper Hamilton Sanders LLP. Sharestates is represented by Rudow Law Group LLC. The decision is available here.