CNMI Government Files Lawsuit Against Cargo Ship M/V Luta

Owners of vessel accused of not returning $400,000 loan made with public funds

By Ferdie De La Torre 

SAIPAN, CNMI (Saipan Tribune, Feb. 9, 2017) – The CNMI government is suing the owners of cargo ship M/V Luta for allegedly refusing to return the $400,000 in public funds that was loaned to them for the vessel’s operations.

The government, through the Office of the Attorney General, is suing Luta Mermaid LLC and its managers/shareholders Abelina T. Mendiola, Deron T. Mendiola, Fidel S. Mendiola III, and Fidel Mendiola Jr. for unjust enrichment, conversion, and other claims.

Lt. Gov. Victor Hocog and Finance Secretary Larrisa Larson were not among those named defendants in the government’s lawsuit.

Former Department of Public Lands secretary John DelRosario had sued Hocog and Larson in their personal and official capacities for handing over $400,000 in government funds for the operation of M/V Luta.

Last December, Superior Court judge pro tempore Timothy H. Bellas dismissed the claims against Hocog, ruling that Hocog’s conduct was covered by legislative immunity.

In the government’s lawsuit filed on Tuesday, assistant attorneys general Christopher M. Timmons and Martin de los Angeles asked the Superior Court to enter a judgment for $400,000 in favor of the CNMI government.

The prosecutors asked the court to order an accounting of the funds the defendants received from the government and to stop the M/V Luta owners from transferring or wasting any property or asset that can be traced to the government’s money.

The prosecutors also asked the court to stop the defendants from removing M/V Luta from the CNMI.

According to the government’s complaint, the Rota Legislative Delegation adopted Rota Legislative Delegation Resolution 19-3 on March 20, 2015, to authorize the Finance secretary to “pay for fuel, lubrication, and costs necessary for the maiden voyage of M/V Luta from Louisiana to Rota and to provide for the personnel and operational costs of the Office of the Mayor of Rota.”

Hocog, who was Senate president at that time, participated in drafting and the adoption of that resolution.

Resolution 19-3 expressed the will of the Rota delegation that the Finance secretary be authorized to loan $400,000 to the ship’s owners, with the amount to be repaid within one year.

On March 27, 2015, two days after being notified by the Rota Legislative Delegation that Resolution 19-3 had been adopted, Larson remitted $400,000 from the general fund to the defendants’ bank account.

Because of this transfer, the defendants allegedly received public funds without legal authorization.

On Jan. 17, 2017, Larson asked the defendants to repay the $400,000.

On Feb. 1, 2017, in a letter from the defendants to Larson, dated Jan. 31, 2017, they admitted to receiving the funds, the prosecutors said.

The prosecutors said the defendants admit in the letter that the funds were deposited into their account on March 30, 2015, without any agreement about repayment.

The defendants have not entered into any contract of any kind with any government agency for the repayment of the $400,000, they said.

The prosecutors said the defendants have not agreed to use the public monies it received from the government for any public purpose and have made no payment to the government.

Saipan Tribune
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