Breach of Contract
A Houston oil company was assessed $34.8 million dollars in damages for wrongfully using a jet in a gold smuggling scam, in violation of the terms of its lease of an aircraft owned by Southlake Aviation LLC. Plaintiff Southlake Aviation leased a GulfStream V jet to Defendant CAMAC International Corp. for travel between CAMAC’s headquarters in Houston and its oil operations in the Congo. In early 2011, Defendant flew the jet to the Congo to deliver $6.5 million of U.S. currency to Congolese warlord General Bosco Ntaganda in exchange for ten boxes of gold. The plane was then seized and impounded by government officials.
This exchange violated trade restrictions imposed by the U.S. Trading with the Enemy Act, which prevents American companies from conducting business transactions with international criminals, and by extension, constituted a breach of contract with Southlake Aviation. Upon confiscation, VFS Financing Inc., which financed Southlake’s purchase of the jet, accelerated its note. The jet was later released and returned to the United States, at which time, VFS repossessed the aircraft. Plaintiffs filed their lawsuit against the CAMAC parties for conversion, breach of lease, and negligence.
The Dallas County jury found that CAMAC operated, maintained, or allowed operation and maintenance of the aircraft in violation of a law, regulation, directive, or order of a governmental authority; that CAMAC violated insurance provisions under the lease by operating the plane in a hostile area that was not covered under the policies it carried; that CAMAC converted the aircraft; and that Southlake’s injuries were proximately cause by the negligence of CAMAC. Plaintiffs’ net recovery was approximately $33.8 million.