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FILED: NEW YORK COUNTY CLERK 05/23/2018 12:18 PM INDEX NO. 154834/2018
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 05/23/2018
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, as assignee and subrogee of
Century 21 Department Stores, LLC,
Index No.:
Plaintiff,
- against -
COMPLAINT
MUHAMMAD NADEEM and ISMAIL KARIM,
Defendants.
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COMPLAINT
Plaintiff, National Union Fire Insurance Company of Pittsburgh, PA, as assignee and
subrogee of Century 21 Department Stores LLC, by and through its undersigned counsel,
McElroy, Deutsch, Mulvaney & Carpenter, LLP, as and for its Complaint against Defendants,
Muhammad Nadeem and Ismail Karim, alleges, upon information and belief, as follows:
THE PARTIES
("
1. Plaintiff, National Union Fire Insurance Company of Pittsburgh, PA ("National
Union"
Union") is a foreign corporation authorized to do business in the State of New York, existing by
the laws of Pennsylvania, and with itsprincipal executive office located at 175 Water Street,
New York, New York 10038.
2. Defendant, Muhammad Nadeem ("Nadeem") is an adult individual residing at
3284 John F. Kennedy Blvd., Jersey City, New Jersey 07306.
3. Defendant Ismail Karim ("Karim") is an adult individual residing at 534
McDonald Avenue, Apt. 6, Brooklyn, New York 11218.
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FACTUALBACKGROUND
("
4. Nadeem is a former employee of Century 21 Department Stores, LLC ("Century
21").
5. Century 21 is a private retailer of clothing, accessories, fragrances, shoes and
other consumer goods.
6. Nadeem's job responsibilities included, among other things, processing new
merchandise in the stock room and transferring the merchandise to the retail floor. This gave
Nadeem access to Century 21's stock room and equipment.
7. On or about March 27, 2015, Century 21 discovered that Nadeem and Karim were
involved in a scheme to defraud Century 21 out of no less than $637,450.
8. The scheme involved strategically manipulating boxes containing fragrances so
that they could be purchased at artificiallylow prices.
9. Specifically, Nadeem would take both expensive and inexpensive fragrances
contained within boxes from the stock room to an enclosed area.
10. In the enclosed area, Nadeem would empty the boxes containing inexpensive
fragrances and replace them with expensive fragrances.
11. This allowed Nadeem, with the knowledge and aid of Karim, to misrepresent the
value of the items contained within the seemingly inexpensive fragrance boxes.
12. After the expensive fragrances were concealed, Nadeem would take the altered
boxes out of the stock room and place them onto the retail floor.
13. Together, Nadeem and Karim pre-determined the location of the altered boxes so
that Karim could retrieve them on the retail floor.
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14. In turn, Karim would purchase these pre-selected fragrance boxes at artificially
low prices.
15. The scheme allowed Nadeem and Karim to purchase high-value fragrances at
prices far below Century 21's intended retailprices.
16. Nadeem and Karim executed this scheme numerous times between October 19,
Period"
2012 and March 27, 2015 (the "Time Period").
17. The total value of losses incurred by Century 21 as a result of this scheme is no
less than $637,450.
"Policy"
18. National Union issued a policy of insurance (No. 07-284-48-11) (the "Policy") to
Century 21.
19. Century 21 presented a claim to National Union against the Policy, seeking to
Defendants'
recover its losses due to theft.
20. In resolution of Century 21's claim against the Policy, National Union issued a
payment to Century 21.
21. Century 21 assigned all of its rights in connection with Century 21's claim to
National Union, in consideration of National Union's payment to Century 21.
22. National Union has also become subrogated to the Century 21's claims and causes
of action against Defendants.
DISCOVERY OF FRAUD
23. Century 21 did not discover the scheme until March 27, 2015.
24. In or about February, 2015, Century 21's Corporate Cosmetic office reported a
large discrepancy between the number of Chanel fragrances listed in their accounting system and
the number of fragrances located at the store.
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25. On March 27, 2015, employees of Century 21 observed video surveillance
revealing Nadeem replacing Calvin Klein fragrances with the more-expensive Chanel fragrances.
26. After the Corporate Loss Prevention office investigated the matter, they
concluded that Nadeem and Karim stole no less than $637,450 in marked-down fragrances over
a two-year period.
27. On or about April 2, 2015, Century 21 referred the matter to the New York
County District Attorney's office.
28. On January 13, 2016, Karim pled guilty to attempted Grand Larceny in the
Second Degree. He was sentenced to five years of probation.
29. On February 4, 2016, Nadeem pled guilty to Grand Larceny in the Second
Degree. He was sentenced to five years of probation.
30. In or around November of 2017, Nadeem sent a check to Century 21 for
$14,285.31 in partial repayment of the loss resulting from the scheme alleged herein.
31. To date, neither Nadeem nor Karim have made any additional payments in
compensation for the loss.
AS AND FOR A FIRST CAUSE OF ACTION
(Fraud against All Defendants)
32. Century 21 repeats and re-alleges each of the allegations contained in the
preceding paragraphs as if fully set forth herein.
33. By placing the expensive fragrances within boxes intended to hold inexpensive
fragrances, Nadeem and Karim materially misrepresented the retail price of items they intended
to purchase.
34. These material representations were false and Nadeem and Karim knew Century
21 did not intend to sell expensive fragrances for the price of inexpensive fragrances.
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35. Because Nadeem and Karim engaged in acts intended to conceal the value of the
fragrances, they knew and intended to falsely misrepresent the retail value of the items they
would purchase.
36. These deliberate acts of concealment and subsequent purchases were intended to
induce Century 21 to falsely believe that they were selling inexpensive fragrances to Karim and,
by extension, Nadeem.
37. Century 21 justifiably relied on these misrepresentations because Nadeem, who
had access to the stock room, re-packaged the fragrances using Century 21's proprietary
equipment.
38. Nadeem and Karim's conduct was wanton, reckless, and outrageous.
39. As a proximate result of Nadeem and Karim's false representations, Century 21
suffered monetary damages in the amount of no less than $637,450.
40. By reason of the foregoing fraud, Nadeem and Karim are jointly and severally
liable and indebted to National Union, as subrogee/assignee of Century 21, in the total sum of at
least $623,164.29, along with punitive damages, interest from the beginning of the Time Period,
attorneys'
fees, costs, filing fees and any other amounts awarded by the Court, and for such other
and further relief as the Court deems just and proper.
AS AND FOR A SECOND CAUSE OF ACTION
(Conversion against All Defendants)
41. Century 21 repeats and re-alleges each of the allegations contained in the
preceding paragraphs as if fully set forth herein.
42. Nadeem and Karim interfered with and deprived Century 21 of its property, in
which Century 21 had a possessory right and interest, when they orchestrated their scheme to
purchase valuable fragrances at prices below the rate set by Century 21.
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43. Century 21 never consented to Nadeem and Karim's scheme to deprive Century
21 of theirpossessory right of ownership of the fragrances.
44. Nadeem and Karim's conduct was wanton, reckless, and outrageous.
45. Nadeem and Karim's conduct that is the subject matter of this Complaint resulted
in their criminal convictions, as set forth in paragraph 23-24, above.
46. By reason of the foregoing conversion, Nadeem and Karim are jointly and
severally liable and indebted to National Union, as subrogee/assignee of Century 21, in the total
sum of at least $623,164.29, along with punitive damages, interest from the beginning of the
attorneys'
Time Period, fees, costs, filing fees and any other amounts awarded by the Court, and
for such other and further relief as the Court deems just and proper.
AS AND FOR A THIRD CAUSE OF ACTION
(Unjust Enrichment against All Defendants)
47. Century 21 repeats and re-alleges each of the allegations contained in the
preceding paragraphs as if fully set forth herein.
48. As a result of the numerous fraudulent purchases, Nadeem and Karim were
unjustly enriched at the expense of Century 21.
49. It is inequitable for Nadeem and Karim to retain the benefits, whether physical
fragrances or monetary, of their scheme to defraud Century 21.
50. Nadeem and Karim must disgorge the benefits they received.
51. By reason of the foregoing fraud, Nadeem and Karim are jointly and severally
liable and indebted to National Union, as subrogee/assignee of Century 21, in the total sum of at
least $623,164.29, along with punitive damages, interest from the beginning of the Time Period,
attorneys'
fees, costs, filing fees and any other amounts awarded by the Court, and for such other
and further relief as the Court deems just and proper.
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WHEREFORE, Plaintiff, National Union, as subrogee/assignee of Century 21,
respectfully demands:
(a) On the first cause of action, damages against the Defendants, Muhammad
Nadeem and Ismail Karim, jointly and severally in an amount not less than $623,164.29, along
attorneys'
with punitive damages, interest from the beginning of the Time Period, attorneys fees, costs,
filing fees and any other amounts awarded by the Court, and for such other and further relief as
the Court deems just and proper.
(b) On the second cause of action, damages against the Defendants, Muhammad
Nadeem and Ismail Karim, jointly and severally in an amount not less than $623,164.29, along
attorneys'
with punitive damages, interest from the beginning of the Time Period, attorneys fees, costs,
filing fees and any other amounts awarded by the Court, and for such other and further relief as
the Court deems just and proper.
(c) On the third cause of action, damages against the Defendants, Muhammad
Nadeem and Ismail Karim, jointly and severally in an amount not less than $623,164.29, along
attorneys'
with punitive damages, interest from the beginning of the Time Period, attorneys fees, costs,
filing fees and any other amounts awarded by the Court, and for such other and further relief as
the
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Court deems just and proper.
Dated: New York, New York McELROY, DEUTSCH, MULVANEY 4
May 23, 2018 CARPENTER, LLP
By: /s/Scott A. Levin
Scott A. Levin
36th
225 Liberty Street, Floor
New York, New York 10281
(212) 483-9490
Attorneys for Plaintiff
National Union Fire Insurance
Company of Pittsburgh, PA
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Preview
FILED: NEW YORK COUNTY CLERK 05/23/2018 12:18 PM INDEX NO. 154834/2018 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 05/23/2018 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -----------------------------------------------------------------X NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, as assignee and subrogee of Century 21 Department Stores, LLC, Index No.: Plaintiff, - against - COMPLAINT MUHAMMAD NADEEM and ISMAIL KARIM, Defendants. ----------------------------------------------------------------X COMPLAINT Plaintiff, National Union Fire Insurance Company of Pittsburgh, PA, as assignee and subrogee of Century 21 Department Stores LLC, by and through its undersigned counsel, McElroy, Deutsch, Mulvaney & Carpenter, LLP, as and for its Complaint against Defendants, Muhammad Nadeem and Ismail Karim, alleges, upon information and belief, as follows: THE PARTIES (" 1. Plaintiff, National Union Fire Insurance Company of Pittsburgh, PA ("National Union" Union") is a foreign corporation authorized to do business in the State of New York, existing by the laws of Pennsylvania, and with itsprincipal executive office located at 175 Water Street, New York, New York 10038. 2. Defendant, Muhammad Nadeem ("Nadeem") is an adult individual residing at 3284 John F. Kennedy Blvd., Jersey City, New Jersey 07306. 3. Defendant Ismail Karim ("Karim") is an adult individual residing at 534 McDonald Avenue, Apt. 6, Brooklyn, New York 11218. 1 of 8 FILED: NEW YORK COUNTY CLERK 05/23/2018 12:18 PM INDEX NO. 154834/2018 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 05/23/2018 FACTUALBACKGROUND (" 4. Nadeem is a former employee of Century 21 Department Stores, LLC ("Century 21"). 5. Century 21 is a private retailer of clothing, accessories, fragrances, shoes and other consumer goods. 6. Nadeem's job responsibilities included, among other things, processing new merchandise in the stock room and transferring the merchandise to the retail floor. This gave Nadeem access to Century 21's stock room and equipment. 7. On or about March 27, 2015, Century 21 discovered that Nadeem and Karim were involved in a scheme to defraud Century 21 out of no less than $637,450. 8. The scheme involved strategically manipulating boxes containing fragrances so that they could be purchased at artificiallylow prices. 9. Specifically, Nadeem would take both expensive and inexpensive fragrances contained within boxes from the stock room to an enclosed area. 10. In the enclosed area, Nadeem would empty the boxes containing inexpensive fragrances and replace them with expensive fragrances. 11. This allowed Nadeem, with the knowledge and aid of Karim, to misrepresent the value of the items contained within the seemingly inexpensive fragrance boxes. 12. After the expensive fragrances were concealed, Nadeem would take the altered boxes out of the stock room and place them onto the retail floor. 13. Together, Nadeem and Karim pre-determined the location of the altered boxes so that Karim could retrieve them on the retail floor. 3593047-1 2 of 8 FILED: NEW YORK COUNTY CLERK 05/23/2018 12:18 PM INDEX NO. 154834/2018 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 05/23/2018 14. In turn, Karim would purchase these pre-selected fragrance boxes at artificially low prices. 15. The scheme allowed Nadeem and Karim to purchase high-value fragrances at prices far below Century 21's intended retailprices. 16. Nadeem and Karim executed this scheme numerous times between October 19, Period" 2012 and March 27, 2015 (the "Time Period"). 17. The total value of losses incurred by Century 21 as a result of this scheme is no less than $637,450. "Policy" 18. National Union issued a policy of insurance (No. 07-284-48-11) (the "Policy") to Century 21. 19. Century 21 presented a claim to National Union against the Policy, seeking to Defendants' recover its losses due to theft. 20. In resolution of Century 21's claim against the Policy, National Union issued a payment to Century 21. 21. Century 21 assigned all of its rights in connection with Century 21's claim to National Union, in consideration of National Union's payment to Century 21. 22. National Union has also become subrogated to the Century 21's claims and causes of action against Defendants. DISCOVERY OF FRAUD 23. Century 21 did not discover the scheme until March 27, 2015. 24. In or about February, 2015, Century 21's Corporate Cosmetic office reported a large discrepancy between the number of Chanel fragrances listed in their accounting system and the number of fragrances located at the store. 3593047-1 3 of 8 FILED: NEW YORK COUNTY CLERK 05/23/2018 12:18 PM INDEX NO. 154834/2018 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 05/23/2018 25. On March 27, 2015, employees of Century 21 observed video surveillance revealing Nadeem replacing Calvin Klein fragrances with the more-expensive Chanel fragrances. 26. After the Corporate Loss Prevention office investigated the matter, they concluded that Nadeem and Karim stole no less than $637,450 in marked-down fragrances over a two-year period. 27. On or about April 2, 2015, Century 21 referred the matter to the New York County District Attorney's office. 28. On January 13, 2016, Karim pled guilty to attempted Grand Larceny in the Second Degree. He was sentenced to five years of probation. 29. On February 4, 2016, Nadeem pled guilty to Grand Larceny in the Second Degree. He was sentenced to five years of probation. 30. In or around November of 2017, Nadeem sent a check to Century 21 for $14,285.31 in partial repayment of the loss resulting from the scheme alleged herein. 31. To date, neither Nadeem nor Karim have made any additional payments in compensation for the loss. AS AND FOR A FIRST CAUSE OF ACTION (Fraud against All Defendants) 32. Century 21 repeats and re-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein. 33. By placing the expensive fragrances within boxes intended to hold inexpensive fragrances, Nadeem and Karim materially misrepresented the retail price of items they intended to purchase. 34. These material representations were false and Nadeem and Karim knew Century 21 did not intend to sell expensive fragrances for the price of inexpensive fragrances. 3593047-1 4 of 8 FILED: NEW YORK COUNTY CLERK 05/23/2018 12:18 PM INDEX NO. 154834/2018 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 05/23/2018 35. Because Nadeem and Karim engaged in acts intended to conceal the value of the fragrances, they knew and intended to falsely misrepresent the retail value of the items they would purchase. 36. These deliberate acts of concealment and subsequent purchases were intended to induce Century 21 to falsely believe that they were selling inexpensive fragrances to Karim and, by extension, Nadeem. 37. Century 21 justifiably relied on these misrepresentations because Nadeem, who had access to the stock room, re-packaged the fragrances using Century 21's proprietary equipment. 38. Nadeem and Karim's conduct was wanton, reckless, and outrageous. 39. As a proximate result of Nadeem and Karim's false representations, Century 21 suffered monetary damages in the amount of no less than $637,450. 40. By reason of the foregoing fraud, Nadeem and Karim are jointly and severally liable and indebted to National Union, as subrogee/assignee of Century 21, in the total sum of at least $623,164.29, along with punitive damages, interest from the beginning of the Time Period, attorneys' fees, costs, filing fees and any other amounts awarded by the Court, and for such other and further relief as the Court deems just and proper. AS AND FOR A SECOND CAUSE OF ACTION (Conversion against All Defendants) 41. Century 21 repeats and re-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein. 42. Nadeem and Karim interfered with and deprived Century 21 of its property, in which Century 21 had a possessory right and interest, when they orchestrated their scheme to purchase valuable fragrances at prices below the rate set by Century 21. 3593047-1 5 of 8 FILED: NEW YORK COUNTY CLERK 05/23/2018 12:18 PM INDEX NO. 154834/2018 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 05/23/2018 43. Century 21 never consented to Nadeem and Karim's scheme to deprive Century 21 of theirpossessory right of ownership of the fragrances. 44. Nadeem and Karim's conduct was wanton, reckless, and outrageous. 45. Nadeem and Karim's conduct that is the subject matter of this Complaint resulted in their criminal convictions, as set forth in paragraph 23-24, above. 46. By reason of the foregoing conversion, Nadeem and Karim are jointly and severally liable and indebted to National Union, as subrogee/assignee of Century 21, in the total sum of at least $623,164.29, along with punitive damages, interest from the beginning of the attorneys' Time Period, fees, costs, filing fees and any other amounts awarded by the Court, and for such other and further relief as the Court deems just and proper. AS AND FOR A THIRD CAUSE OF ACTION (Unjust Enrichment against All Defendants) 47. Century 21 repeats and re-alleges each of the allegations contained in the preceding paragraphs as if fully set forth herein. 48. As a result of the numerous fraudulent purchases, Nadeem and Karim were unjustly enriched at the expense of Century 21. 49. It is inequitable for Nadeem and Karim to retain the benefits, whether physical fragrances or monetary, of their scheme to defraud Century 21. 50. Nadeem and Karim must disgorge the benefits they received. 51. By reason of the foregoing fraud, Nadeem and Karim are jointly and severally liable and indebted to National Union, as subrogee/assignee of Century 21, in the total sum of at least $623,164.29, along with punitive damages, interest from the beginning of the Time Period, attorneys' fees, costs, filing fees and any other amounts awarded by the Court, and for such other and further relief as the Court deems just and proper. 3593047-1 6 of 8 FILED: NEW YORK COUNTY CLERK 05/23/2018 12:18 PM INDEX NO. 154834/2018 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 05/23/2018 WHEREFORE, Plaintiff, National Union, as subrogee/assignee of Century 21, respectfully demands: (a) On the first cause of action, damages against the Defendants, Muhammad Nadeem and Ismail Karim, jointly and severally in an amount not less than $623,164.29, along attorneys' with punitive damages, interest from the beginning of the Time Period, attorneys fees, costs, filing fees and any other amounts awarded by the Court, and for such other and further relief as the Court deems just and proper. (b) On the second cause of action, damages against the Defendants, Muhammad Nadeem and Ismail Karim, jointly and severally in an amount not less than $623,164.29, along attorneys' with punitive damages, interest from the beginning of the Time Period, attorneys fees, costs, filing fees and any other amounts awarded by the Court, and for such other and further relief as the Court deems just and proper. (c) On the third cause of action, damages against the Defendants, Muhammad Nadeem and Ismail Karim, jointly and severally in an amount not less than $623,164.29, along attorneys' with punitive damages, interest from the beginning of the Time Period, attorneys fees, costs, filing fees and any other amounts awarded by the Court, and for such other and further relief as the 3593047-1 7 of 8 FILED: NEW YORK COUNTY CLERK 05/23/2018 12:18 PM INDEX NO. 154834/2018 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 05/23/2018 Court deems just and proper. Dated: New York, New York McELROY, DEUTSCH, MULVANEY 4 May 23, 2018 CARPENTER, LLP By: /s/Scott A. Levin Scott A. Levin 36th 225 Liberty Street, Floor New York, New York 10281 (212) 483-9490 Attorneys for Plaintiff National Union Fire Insurance Company of Pittsburgh, PA 3593047-1 8 of 8