Marianas Variety

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    Thursday, August 22, 2019-3:41:13A.M.

     

     

     

     

     

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No settlement reached in MV Luta lawsuit; negotiations continue

NO settlement has been reached in the government’s lawsuit over the $400,000 in public funds loaned to MV Luta’s owners, Luta Mermaid LLC, four years ago, but negotiations are still ongoing, Variety learned.

Last week, Superior Court Associate Judge Kenneth L. Govendo held a mandatory settlement conference for the parties in the lawsuit, but they did not reach a settlement, he said.

Assistant Attorney General Benjamin Petersburg represents the government while attorney William M. Fitzgerald represents Luta Mermaid LLC.

In Feb. 2017, the AG’s office, on behalf of the Department of Finance, filed a complaint against MV Luta’s registered owner, Luta Mermaid LLC, and its officers: Abelina T. Mendiola, Deron T. Mendiola, Fidel S. Mendiola and Fidel Mendiola Jr.

Allegations against the defendants include receiving public funds without authorization, wrongful retention of public funds, unjust enrichment, and using public funds for personal use

The AG’s office is seeking the recovery of the public funds.

MV Luta has been renamed MV Mariana and is now owned by a Guam-based company.

On March 20, 2015, the Rota Legislative Delegation adopted Resolution 19-3 authorizing the secretary of Finance “to pay for fuel, lubrication and costs necessary for the maiden voyage of MV Luta from Louisiana to its new home port at Rota and to provide for the personnel and operational costs of the Office of the Mayor of Rota.”

The funding for Resolution 19-3 came from the $2 million annual Saipan casino license fee allocated to Rota under the expenditure authority of the secretary of Finance.

Resolution 19-3 stated that Luta Mermaid agreed to repay the $400,000 within one year.

On June 29, 2017, the Superior Court dismissed the taxpayer lawsuit filed by John Del Rosario, who sued then-Finance Secretary Larissa Larson for releasing $400,000 to Luta Mermaid.

In exchange for the dismissal of the lawsuit, the Commonwealth agreed that Rota Legislative Delegation Resolution 19-3 was not a proper source of authority for public funds transfer.

The Commonwealth also agreed that Finance “shall adopt standard procedures to ensure that an incident like this never happens again.”

Del Rosario filed his lawsuit in May 2016 against Laron and then-Lt. Gov. Victor B. Hocog who, as a senator, was a member of the Rota delegation that adopted Resolution 19-3.

Del Rosario’s complaint also stated that Luta Mermaid was a private corporation owned by Hocog’s relatives, and the $400,000 was released to the company without introducing it in the House of Representatives for proper appropriation.

In Dec. 2016, the Superior Court dismissed Del Rosario’s claims against Hocog, saying his conduct as a senator was covered by legislative immunity.