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Polish government sues Boston investor over failed margarine factory

An investment in Polish margarine that went sour could cost a Boston venture capital firm and its principal owner more than $3 million in arbitration costs, if a federal judge here agrees to enforce an international tribunal's decision against them.

The Polish government this week filed a lawsuit in US District Court in Boston against Vincent Ryan and his Schooner Capital over the costs it was awarded in 2015 by an international tribunal, following more than 20 years of legal wrangling between Poland and Ryan over the fate of a margarine and vegetable-oil factory Schooner took over in 1994 following the collapse of communism in that country.

The tribunal, which met in Paris, said Schooner and Ryan had failed to make their case that Poland owed them more than $18 million in damages for the bankruptcy of Kama Foods by what they charged were interminable demands for back taxes based on the fees a separate company Schooner set up charged Kama for management consulting.

According to the arbitration decision and a Polish press account, Ryan had set up that company to make investments in post-communism Poland. In 1994, Ryan's company paid the Polish government nearly $19 million for a controlling interest in Nadodrzanskie Zaklady Przemyslu Tlusczowe - which it then renamed Kama Foods - in Brzeg, a town on the banks of the Oder River in southwestern Poland that was first settled several thousand years ago.

Ryan's company also promised to invest $38 million to bring Kama up to the state of the art in margarine and edible oil production.

Not long after the new company took over, the government began demanding taxes based on the fees Kama was paying to the company.

Kama ran into financial difficulties as the Polish government pressed its demands for back taxes. In 2000, Kama stopped making social-security payments for its workers. The next year, it stopped paying its workers.

It tried various measures to get back into the black, including selling off its margarine trademark and excess power from a power plant it owned, but the measures all failed and the company declared bankruptcy in 2003.

Ryan and Schooner said the company could have recovered, but that the court battles over the back taxes meant nobody would lend it money and so the company's failure was ultimately the Polish government's fault.

In 2011, Ryan sought to have an international tribunal hear his argument that the Polish government owed him the roughly $18 million he claimed the tax issue had cost him.

After legal wrangling over whether such a tribunal would have any jurisdiction - and even over which city it would hold hearings in - a tribunal of arbiters from Pakistan, Chile and Mexico met in Paris, held hearings and basically concluded in 2015 that Ryan had no case and that he owed Poland roughly $2.7 million for its costs related to the arbitration.

The Polish government's suit seeks that amount plus 12% in annual interest as called for under Massachusetts arbitration law - which it says would apply because Ryan lives here and Schooner is based here, in Boston's Leather District.

Polish complaint in federal court (41k PDF).
Arbitration decision (1.5M PDF).
More documents related to the case.


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Snow preparations begin in earnest in Roslindale

With the entire region hunkering down as the season's first nor'easter churns up the coast to slam us upside the head with nature's fury, Molly the Roving UHub photographer spotted an early space saver on Philbrick Street in Roslindale this morning.


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Not so fast with that Chick-fil-A in Copley Square

When news broke last week that Chick-fil-A had an agreement to move into the Boylston Street location now occupied by a Boloco, it was news not just to fans and haters of the chicken chain, but to Boloco.

Boloco owner John Pepper says today:

Related to the rumors of Chick Fil A taking over our Copley location, there is not yet any agreement for Boloco to leave. We have a lease thru 2020 and a decade of options after. We are working with landlord to find a solution based on what we’ve read

The owner of the building is Raj Dhanda, who also owns the Crimson Galleria in Harvard Square and other commercial properties. Last year, Dhanda filed a federal RICO lawsuit to try to block a medical-marijuana dispensary from opening in Harvard Square.


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Person shot in the leg on Magnolia Street in Dorchester

Shortly after 6 a.m., per PCFN and Monica Cannon-Grant.

Thu, 11/15/2018 - 06:07
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Lynn, Lynn, city of machetes, don't break into a man's house, he might carve you into spaghettis

WCVB reports a couple of sad-sack yeggs chose the wrong Lynn house to break into the other night: The homeowner quickly got the better of them with his trusty machete, the one he keeps under his bed:

I have a shaved head, a crazy beard, I work out, climb mountains, run races, I’m covered in tattoos and I was in my underwear with a machete.


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Man sought after midday attempted rape in the South End

Boston Police report they are looking for a man who tried to rape a woman around 12:30 p.m. in the area of East Canton and Albany streets in the South End.

Read more.

Wed, 11/14/2018 - 12:28
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Real-estate appraiser admits role in mortgage-fraud scheme after spending six years in Ireland fighting extradition

Patrick Lee, 45, admitted today in federal court that he and relatives defrauded lenders of $1.5 million in a condo-flipping scheme in 2005 and 2006, involving properties in Dorchester, South Boston and Randolph.

The US Attorney's office in Boston reports:

Lee or a relative bought five multi-family buildings in Dorchester and South Boston, financed those purchases with fraudulently obtained mortgage loans, and quickly converted the buildings to condominiums which facilitated the resale of individual units in the buildings to straw buyers. The straw buyers were recruited for this purpose and their purchases were financed with fraudulently obtained mortgage loans. The straw buyers were assured that they would not have to put any money down or pay the mortgages, and that they would get a fee at closing and/or a share of the profits when the properties were sold. The loans were funded with interstate wire transfers from the mortgage lenders to the closing attorneys’ conveyancing accounts, and the proceeds were then distributed to Lee and/or a family member, the recruiters, and others involved in the scheme. According to the government, mortgage lenders suffered losses of more than $1.5 million.

Lee left the Boston area for Newtown, County Kildare in Ireland in 2007. In 2008, the Secret Service filed a sealed criminal complaint against him in Boston federal court. A grand jury indicted him in 2010, although the indictment was not released until 2011, at which point prosecutors began extradition proceedings against him in Ireland. Lee fought back by claiming he was immune from extradition because he had committed some of the alleged offenses while in Ireland and Irish law forbids extradition for crimes committed on Irish soil.

As one court rejected his argument, he appealed, until finally the Irish Supreme Court got the case in 2017. In October, the court rejected his arguments and said he could be extradited to the US.

According to the US Attorney's office, Lee faces up to 30 years in prison at his Feb. 28 sentencing on charges of wire fraud and unlawful monetary transactions.


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SUV hanging by rear wheels off pier in Charlestown Navy Yard

Stanley Forman reports the driver hit the gas instead of the brake and over Pier 6 he went. Driver and passenger got out OK.


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How's 2 to 3 inches of snow sound?

The latest NWS maps show 2 to 3 inches of snow, even in Boston, Thursday night into Friday. And that's why the French Toast Alert is back on the home page.


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When are those Chinese trains getting here? Dead train at Assembly Square

The MBTA reports Orange Line delays of up to 15 minutes outbound due to a deceased train at Assembly Square.


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