Entering into a settlement agreement does not always mark the end of a litigation. A host of issues may arise in enforcing settlement agreements, as the recent decision in United States v. Prevezon Holdings, 2018 WL 679888 (S.D.N.Y. Feb. 2, 2018) makes clear. Prevezon involved a sensational set of facts, including allegations of alleged elaborate Russian tax fraud and complex money-laundering schemes, and the death in prison of a Russian lawyer investigating the alleged tax fraud. Shortly before a civil trial for asset forfeiture was set to begin against Prevezon, which allegedly received and laundered a portion of the fraud proceeds, the United States and Prevezon agreed to settle the case. Ruling on the government’s subsequent motion to enforce the settlement agreement, Southern District Judge William H. Pauley III addressed issues ranging from New York contract law to international comity. Judge Pauley’s detailed and thorough analysis provides valuable insights for counsel negotiating and seeking to enforce settlement agreements.

‘United States v. Prevezon’

The government claimed that Prevezon had received and laundered through real estate investments in Manhattan approximately $1.96 million as part of a complex scheme to defraud the Russian treasury of millions of dollars in tax refunds. Shortly after the case was initiated, in September 2013, the court entered a protective order restraining a number of Prevezon’s U.S.-based assets. The government later sought to freeze a debt of approximately 300 million euros owed to Prevezon by a European company, AFI Europe N.V. (the AFI Europe Debt). The government sought the assistance of the Dutch authorities, who restrained the AFI Europe Debt at the government’s request (the US Restraint). The AFI Europe Debt was then added to an amended protective order in the Prevezon action. Id. at *1.