Tuesday, December 4, 2012

DAI to Gross: You're on your own, pal

The Maryland company that hired Alan Gross to carry out a risky Internet project in socialist Cuba took out a $5 million insurance policy to protect against "wrongful detention."
Gross was detained in Cuba three years ago, but Federal Insurance Co. has refused to pay him or his family a single centavo.
Instead, the insurance company has been paying DAI, the contractor that bought the insurance policy and hired Gross.
Gross and his wife, Judy, sued the insurance company on Nov. 16 in U.S. District Court in Greenbelt, Md. The lawsuit alleges "breach of contract and for tortious failure to act in good faith," saying the insurance company refused "to fulfill its contractual obligations" under the wrongful detention policy.
The insurance company, located at 15 Mountain View Road in Warren, N.J., has not yet answered the complaint (See lawsuit).
The lawsuit says the company appears to be paying DAI and other parties now so that it can deplete the $5 million policy limit and avoid potentially greater payments in the future. Already, the lawsuit says, the company has evidently paid out $2.3 million of the $5 million to DAI and others.
These payments would cover some of DAI's losses. The company lost some $21 million in future receipts after Gross was arrested and its USAID contract was cancelled, records show.
Gross lost not only his freedom, but his livelihood and future wages. And even if all the $2.7 million remaining on the policy went to him and his wife, it would not cover all of their losses, which include more than $2 million in legal fees so far, the lawsuit says.

The insurance company apparently does not believe Alan or Judy Gross are covered under the wrongful detention policy, an interpretation their lawyers dispute.
DAI's website says the company cares about ethics. It states:
Ethics, integrity, and compliance are fundamental DAI values at the core of how DAI interacts with clients, partners, employees, and vendors across the globe.
If you have a question or concern on ethics or compliance that you'd like to communicate to DAI, please contact the Chief Ethics and Compliance Officer directly at +1-301-771-7998 or at compliance@dai.com. If you wish to remain anonymous, please visit www.ethicspoint.com and choose "File a New Report."
The Gross lawsuit against the insurance company states:
Upon information and belief, Defendant Federal already has paid out, to other actual or alleged insureds, approximately $2.3 million of the $5 million policy limit; thus, approximately $2.7 million of that limit remains available to pay Plaintiffs’ Expenses. 
Plaintiffs have not been able to verify the exact amount of Federal’s prior payments under the Wrongful Detention Policy, or to whom they were made; but, upon information and belief, Federal has made some of those prior payments to DAI, the Maryland-based contractor who purchased the Wrongful Detention Policy. 
Upon information and belief, Defendant Federal also intends to continue depleting the Wrongful Detention Policy’s remaining coverage limits through additional payments to other actual or alleged insureds, including DAI. 
Upon information and belief, Plaintiffs’ Expenses to date already exceed the approximately $2.7 million in remaining available limits, including more than $2 million in legal fees and expenses, and Plaintiffs’ Expenses will continue to increase substantially in the future. 
Federal was and is obligated under the Wrongful Detention Policy to pay all of Plaintiffs’ Expenses, up to a maximum of $5 million. Yet, Federal has wrongfully failed and refused to pay a single dollar of Plaintiffs’ Expenses. 
Mr. Gross and DAI entered into a sub-contract (the “DAI Agreement”) on February 10, 2009, in connection with an existing contract between DAI and USAID that was part of USAID’s Cuba Democracy and Contingency Planning Program. 
DAI, subject to ultimate agreement and approval by USAID, developed and implemented a project to increase internet access in Cuba (the “Project”), and contracted with Mr. Gross in connection with the Project. 
Mr. Gross contracted with DAI in connection with the Project through his business, JBDC LLC (“JBDC”), of which Mr. Gross was the sole member and sole employee. 
As a necessary and contemplated part of the Project, Mr. Gross made five trips to Cuba between March 2009 and December 2009. 
On December 3, 2009, Mr. Gross was arrested by Cuban authorities due to the work that he was performing on the Project. 
After a summary trial in March 2011, Mr. Gross was convicted and sentenced to fifteen years in prison. The Cuban court determined that Mr. Gross participated in “a subversive project of the U.S. government that aimed to destroy the Revolution through the use of communications systems out of the control of [Cuban] authorities.” 
Mr. Gross remains incarcerated in Cuba. At this time, there are no indications that Mr. Gross will return to his family within the next decade.

No comments: