Tuesday, July 28, 2015

Starwood Management: Drug History Forces Airline to Settle Claim

Courthouse News Service

LAS VEGAS (CN) - An insurer settled with a private airline whose jet was seized by the DEA and whose owner allegedly concealed his criminal history.

Commerce & Industry Insurance on Friday voluntarily dismissed its federal claim against Starwood Management with prejudice after reaching an undisclosed settlement agreement.

The DEA in 2012 seized two jets owned by Las Vegas-based Starwood Management after the planes landed in Texas and Arizona, coming from Mexico.

The plane seized in Tucson was insured by Commerce & Industry, which says it was not aware of Starwood's connection with Christian Eduardo Esquino Nunez when it underwrote an insurance policy and rider for the 1984 Gulfstream G-1159A jet.

In its July 2012 complaint, Commerce & Industry called Nunez the alter ego of Starwood, with "such a unity of interest" that "the fiction of Starwood as an entity separate from Nunez would, under the circumstances, sanction a fraud and promote an injustice."

The insurer in January 2012 had renewed a $1.5 million policy, with a rider waiving exclusions for governmental seizure of the luxury jet. The policy allowed it to cancel coverage due to criminal convictions or fraud or misrepresentations made in obtaining the policy or filing a claim.

When Starwood applied for the coverage, the insurer says, Starwood claimed that no officer, partner or pilot had ever been indicted or convicted in any drug-related cases.

But Nunez had been indicted on a count of conspiracy to possess and distribute cocaine in 1991, and pleaded guilty in 1993 to a superseding information and was sentenced to prison time, Commerce & Industry says.

"Had Nunez/Esquino answered the application question truthfully, Commerce & Industry would have declined to issue a policy to Starwood and/or would have rescinded the policies," the insurer says. It says Nunez goes by the names Ed Nunez and Christian Esquino.

Nunez's criminal history includes a 2004 conviction for conspiracy to commit fraud by falsifying log books for aircraft he bought in Mexico and sold in the United States, according to the complaint.

In 1993, he pleaded guilty to concealing money from the IRS in a case involving more than 480 kilograms of cocaine smuggled into Florida, The Associated Press reported on Dec. 15, 2012.

Nunez, through Starwood Management, owned the jet that crashed in December 2012, killing Mexican pop star Jenni Rivera and six others.

Canada's National Post newspaper reported in June 2012 that the DEA was investigating allegations that Esquino Nunez rented a plane intended to smuggle former Libyan dictator Muammar Gaddafi's son, Saadi Gaddafi, into Mexico.

In its lawsuit, Commerce & Industry said it rescinded its coverage and refunded Starwood's premiums due to Starwood's concealing Nunez's identity, his 1991 indictment, 1993 and 2004 convictions, and his subsequent deportation to Mexico.

In the 2004 case, the insurer says, Christian Esquino pleaded guilty to conspiracy to commit fraud involving an aircraft, was sentenced to 2 years in prison and served it, and was deported to Mexico upon being released.

Another insurer, QBE, rescinded its coverage of the Starwood Hawker jet which the DEA seized in Texas in 2012, also alleging that Starwood had provided inaccurate information.

Commerce & Industry sought declaratory judgment that its policy was canceled effective January 2011 and did not apply to the plane seizure.

Commerce & Industry attorney Kym Cushing, with Wilson, Elser, Moskowitz, Edelman & Dicker, did not return a call seeking comment.

Starwood officials could not be reached for comment.  

Original article can be found here:  http://www.courthousenews.com

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