Judge Awards Motorola $4.26 Billion - TheStreet

Judge Awards Motorola $4.26 Billion

The Telsim case takes another turn.
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A federal judge ordered a Turkish family to pay

Motorola

(MOT)

$4.26 billion in a fraud case involving the tech giant's financing of wireless telco Telsim.

U.S. District Judge Jed Rakoff said members of the Uzan family "perpetrated a huge fraud" on Motorola in securing money under the guise of financing for Telsim, which three years ago defaulted on $2 billion in loans. He ruled that "the Uzans have siphoned more than a billion dollars of plaintiffs' money into their own pockets and into the coffers of other entities they control."

Starting in 1998, Motorola provided Telsim with equipment financing, financing to purchase a GSM cellular license from the government of Turkey and the major supply components for a GSM cellular telephone system. Telsim's last payment to Motorola took place in June 2000, Motorola said. The company says that beginning in late 2000, the Uzans requested to reschedule loan payments and then began "a campaign of fraudulent tactics" to conceal their looting.

Motorola said the judge's decision means the company can collect the damages, half of which are deemed compensatory and half punitive, "from the assets of any company (including 130 companies listed in the court's opinion) the defendants own and/or control, directly or indirectly."

Nokia

(NOK) - Get Report

, which sued the Uzans along with Motorola in 2002, takes control of 7.5% of Telsim's stock as a result of the ruling.

"Today's judgment confirms our belief of wrong-doing against Nokia and proves the activities against us were fraudulent and intentional," said Olli-Pekka Kallasvuo, chief financial officer of Nokia. "We will now use this ruling as part of our continued effort of recovering the funds."

On Thursday afternoon, Motorola added 7 cents to $9.17 and Nokia fell 6 cents to $15.22.