Defective Bond: Court Denies Insurance Firm’s Surety in Over US$1M Lawsuit

Defendants Salah Farhat and Tamer Farhat walking out of Criminal Court ‘C’ After the judge ruling

Monrovia – Criminal Court ‘C’ Judge Peter W. Gbeneweleh has disqualified the American Underwriters Group as surety in a US$1,355,186.58 (United States Dollars One Million Three Hundred Fifty-Five Thousand One Hundred Eight-Six dollars Fifty Cents) criminal case.

Report by Augustine T. Tweh, [email protected]

The American Underwriters Group was disqualified by Judge Gbeneweleh to serve as a surety due to defects in its criminal appearance bond filed to the court.

The firm, an insurance company, has filed a criminal appearance bond as a surety at the court (Criminal Court ‘C’) for two Lebanese nationals, Salah Farhat and Tamer Farhat.

Salah and Tamer have been indicted by the Grand Jury of Montserrado County. They were indicted during the November 2018 Term of court for the alleged commission of the crimes of Money Laundering, Theft of Property, Misapplication of Entrusted Property and Criminal Conspiracy.

The defendants are being prosecuted by the Republic of Liberia by and through the Tayo Motors represented by its majority shareholders, Ezzat Eid, a Lebanese businessman.

In the judge ruling of the motion for the justification of surety, Judge Gbeneweleh said the American Underwriters Group does not meet the legal requirements to pose a surety bond on behalf of the defendants.

Judge Gbeneweleh also added that the tax clearance attached to the surety bond has expired and therefore cannot guarantee the defendants in the criminal case.

“The only issue for the determination of this Motion for the Justification of Surety is whether or not the American Underwriters Group meets all of the requirements to pose a surety bond for the defendants/Movants,” the judge said in his ruling.

The ruling adds: “Firstly, this court notes that the tax clearance annexed to the surety bond, which was issued on November 2, 2018, expired January 31, 2019, and was ineffective or invalid for the surety bond filed in February 2019. This court says that there is no current tax clearance annexed to movants’ motion for the justification of surety, evidencing the full payment of all taxes that the surety due the Government of Liberia.”

Judge Gbeneweleh noted that there are requirements under the Criminal Procedure Law that are mandatory and must be met by an insurance company serving as a surety in a criminal case.

“The American Underwriters Group is not legally qualified to pose a surety bond for the defendants/movants for its failure to have met all of the requirements as a surety. There is no need to delve into the sufficiency of the bond due to the disqualification of the surety for reason herein mentioned supra.”

The ruling adds: “Wherefore and in view of the foregoing, the surety bond is hereby set aside for reason herein stated above. however, the American Underwriters Group remains liable until it either meets all of the legal requirements as a qualified surety or another surety proffers a bond and it is approved and allowed by this Honorable Court within six days as of the date of this ruling.”

The motion for the justification of surety grew out of state prosecutions’ 13 counts exceptions to the bond, challenging the qualification of the criminal appearance bond of the defendants.

During the initial stage of the case, the defendants’ bond which was filed by the company as a surety in the tune of US$3,542,490.72 was approved by the then presiding judge J. Boima Kontoe during the February 2019 term of court.

In the counts, the prosecution argued that the amount charged in the indictment should be doubled since the defendants realized a gain from the amount.

The state prosecutors also argued in the counts that the bank balance of the company is insufficient as the amount of bail as provided for under section 13.2 of the Criminal Procedure Law.

“The surety bond of the American Underwriters Group does not qualify for reason that the tax clearance under condition three (3) was issued on November 2, 2018, for 90 days which expired on January 31, 2019. As for condition four (4), there is no legal instrument from the Central Bank of Liberia (CBL) attached to said bond to certify that the surety has sufficient assets, other than assets which cover all its obligations, to cover the criminal appearance bond,” State prosecutors argued.

In justification of the bond, on March 5, 2019 defense counsels filed a 12-count motion for the justification of surety before the court, arguing that Article 21 (d) of the Liberian Constitution does not provide for excessive bail, excessive fines, nor excessive punishment in a criminal matter.

The defense counsels also argued the surety bond proffered by the company (American Underwriters Group) meets all requirements under the law.