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 Former Bahrain Bank Executive Must Answer $9 Billion Fraud Claim In U.S. CourtWASHINGTON,  Oct. 10, 2012  /PRNewswire/ -- A Los Angeles federal court onTuesday refused to dismiss a lawsuit brought by  Ahmad Hamad Algosaibi  &Brothers Company (AHAB) against  Glenn Stewart, an alleged key lieutenant in a $9 billion  Ponzi scheme.  Stewart, who illegally fled  Bahrain  while undercriminal investigation, now lives in  Pacific Palisades, CA.   AHAB alleges that Stewart was one of the principal architects of a massiveinternational fraud and money laundering scheme masterminded by the Saudi /Kuwaiti national  Maan Al Sanea, who was entrusted by AHAB with the operation ofa small financial services wing of the conglomerate, used his position to engagein billions of dollars in unauthorized borrowing, and then misappropriated theproceeds.  Stewart tried to persuade the  California  court that it shoulddismiss AHAB's lawsuit, arguing that AHAB's claims were barred under Saudi and Bahrain  law, but Judge  Dale Fischer  of the U.S. district court rejected thosecontentions, describing Stewart's claim that AHAB lacked standing to sue him as"frivolous." The complaint alleges that in 2003, Stewart hit upon a scheme to incorporateshell banks in  Bahrain  as a way to leverage even more unauthorized borrowingthat could be siphoned off to  Al Sanea.   Al Sanea  signed off on the plan, andtogether they launched The International Banking Company (TIBC).   Al Sanea  andStewart allegedly backed TIBC's borrowing with forged AHAB guarantees, raisingbillions of dollars in the international capital markets.  At one point TIBCwas, according to its financial statements, the fourth-largest bank in  Bahrain,but in fact it was entirely a sham, with no real customers or business accordingto the complaint.  Stewart is alleged to have set up his own companies toextract tens of millions of dollars to himself through secret commissions onsham transactions.The Central Bank of  Bahrain  and the Bahrain Public Prosecutor orderedinvestigations of TIBC and  Al Sanea's other bank,  Awal Bank, and investigatorswere appointed.  Three separate reports commissioned by the  Bahrain government-by Ernst & Young, Kroll, and Hibis International-all found evidenceof serious wrongdoing, and criminal charges were lodged against  Al Sanea,Stewart, and other top executives and employees of TIBC and Awal.  Stewart wasplaced under a travel ban during the pendency of the  Bahrain  investigation,but he violated the ban and fled the country in  May 2010  for Los Angeles.   Judge Fischer held that AHAB could pursue all of its claims under  Bahrain  lawand all but one under Saudi law.  The permitted claims include AHAB's principalclaims against Stewart for aiding and abetting fraud, aiding and abettingconversion/misappropriation, and unjust enrichment, as well as mismanagement andconflict of interest with respect to TIBC.  The court also allowed AHAB to proceed with claims relating to a series oftrade-finance deals from which Stewart allegedly extracted bogus commissions forwork not actually performed.  The one claim that the court did not recognize wasfor direct breach of a duty of trust: the court found that Stewart'srelationship with AHAB was too remote to create a direct duty of trust, but thatStewart would have to answer AHAB's fraud, misappropriation, and other claims.AHAB's global legal coordinator  Eric Lewis  stated that "we are very pleasedthat AHAB's case against Mr. Stewart will be allowed to proceed.  Mr. Stewartwas integral to this Ponzi scheme and also siphoned off tens of millions ofdollars to his own offshore companies through sham commissions.  We look forwardto proving AHAB's claims against Mr. Stewart at trial."SOURCE  AHABGraham Miller, +1-571-438-2276, graham@sphereconsulting.com