Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 1 of 20 PageID# 1

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1 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 1 of 20 PageID# 1 pi! IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION PRIMUS TELECOMMUNICATIONS, INC Jones Bridge Road, Suite 900 McLean, Virginia c. Plaintiff, v. Case No. TOSHIBA OF EUROPE LTD. Sixth Floor 100 Ludgate Hill London, EC4M 7RE United Kingdom JURY TRIAL DEMANDED and RICHARD C. VEST Hertfordshire HP4 2JW United Kingdom Defendants. COMPLAINT Plaintiff PRIMUS TELECOMMUNICATIONS, INC. ("Primus"), for its Complaint against TOSHIBA OF EUROPE LTD. ("Toshiba") and RICHARD C. VEST ("Vest"), alleges and avers as follows: NATURE OF THE ACTION 1. This case arises from a contract entered between Primus and Toshiba under which Primus agreed to provide international long-distance telecommunications services to Toshiba in exchange for payment by Toshiba and other consideration. The contract, which was called the Master Services Agreement, was executed for Toshiba by Vest, whom Toshiba had appointed and held out as its Information Services and Communications Manager. Toshiba now claims

2 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 2 of 20 PageID# 2 that Vest lacked actual authority to execute the contract, and is refusing to pay $2,825,466.16, plus interest, for services rendered by Primus between November 18 and December 3, Based on Vest's actual or apparent authority to enter the Master Services Agreement on behalf of Toshiba, Primus seeks in Count I of this suit to (a) obtain damages for Toshiba's breach of the contract arising from its failure to pay an overdue invoice, and (b) obtain a declaratory judgment that Toshiba is contractually obligated to pay another invoice on which payment is due on or about January 15,2009. In the remaining Counts, Primus seeks damages (a) against Toshiba for fraud, violation of the Virginia Business Conspiracy Act, Va. Code Sections and , and for its negligent supervision of Vest (which claims are pled against Toshiba in the alternative to the extent required by law), and (b) against Vest for fraud and violation of the Virginia Business Conspiracy Act. THE PARTIES 3. Plaintiff Primus is, and at all times relevant hereto was, a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 7901 Jones Branch Drive, Suite 900, McLean, Virginia Defendant Toshiba is, and at all times relevant hereto was, a United Kingdom private limited company with its principal place of business at 100 Ludgate Hill, Sixth Floor, London, EC4M 7RE, United Kingdom. 5. Upon information and belief, Defendant Vest is, and at times relevant was, an individual domiciled in the United Kingdom residing at 5 Beech Drive, Berkhamsted, Hertfordshire HP4 2JW, United Kingdom. Information Services and Communications. Toshiba employed Vest as a senior manager for On information and belief, Vest is a citizen of the United Kingdom.

3 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 3 of 20 PageID# 3 JURISDICTION AND VENUE 6. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. 1332(a)(2), because this is a suit between a citizen of Virginia (Primus) and citizens of a foreign state (Toshiba and Vest). The amount in controversy exceeds $75,000, exclusive of interest and costs. 7. Venue is proper in this District pursuant to 28 U.S.C (a) in that a substantial part of the events or omissions which gave rise to the claim occurred in this District, and in the alternative because Toshiba and Vest are subject to personal jurisdiction in this District at the time this action commenced. 8. Under Paragraph 19.2 of the Master Services Agreement between Primus and Toshiba, Toshiba consented "to the nonexclusive jurisdiction of the courts in Fairfax County, Virginia or of the federal courts located in the Eastern District of Virginia (Alexandria Division) with respect to any dispute, controversy or other matter relating to or arising out of this Agreement." In Paragraph 19.3 of the Master Services Agreement, Toshiba also irrevocably waived "to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum." THE DISPUTE 9. Primus is a telecommunications company based in McLean, Virginia that, among other products and services, offers Voice over Internet Protocol ("VOIP") call termination service to corporate customers. When providing VOIP call-termination service, Primus uses its

4 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 4 of 20 PageID# 4 global network system to deliver long-distance voice communications over the Internet to telephone users around the world. 10. On September 17,2008, a telecommunications sales agent named Marc Bachmann, based in Florida, contacted a Primus sales employee, James Barker, who works at Primus' office in McLean, Virginia. Mr. Bachmann informed Primus' Mr. Barker that Toshiba was seeking proposals from several telephone carriers to supply VOIP call termination service. Mr. Bachmann informed Primus' Mr. Barker that Toshiba was looking for VOIP call-termination service for about three-million minutes of telephone communications per day, and that Toshiba was prepared to sign a two-year contract for a minimum of $250,000 worth of service per month. Shortly afterwards, Mr. Bachmann forwarded to Mr. Barker a list (which was provided originally by Vest) indicating the destination countries of interest to Toshiba, and the actual and maximum Toshiba volumes for those countries. 11. On September 24 and 25,2008, Mr. Bachmann also informed Toshiba would conduct tests of Primus' VOIP call-termination service through "Tim Scott," with an address at tom.scott@toshiba-toel.com (later corrected to tim.scott@toshiba-toel.com), and who could be reached by telephone through Toshiba's main telephone number ( ). On information and belief, Mr. Scott's name and contact information was provided to Mr. Bachmann by Vest. Mr. Bachmann sent a copy to Vest of at least one of his September s to Primus. 12. In the following week, there were a series of testing-related communications between Primus technical staff in Virginia and Tim Scott in London.

5 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 5 of 20 PageID# Mr. Bachmann provided to Primus' Mr. Barker the name and contact information for Vest, who Mr. Bachmann described as the person at Toshiba that would have to sign off on all the contractual documents. 14. Primus' Mr. Barker took steps to confirm that Vest was associated with Toshiba. Mr. Barker verified the address and main telephone number for Toshiba in the United Kingdom from Toshiba's website, and in late September 2008, called the main Toshiba telephone number, and was directed by the Toshiba receptionist to Vest's voic . Mr. Barker left a message for Vest. On October 2,2008, Mr. Barker and Anthony DePietro (another Primus employee in Virginia) spoke with Vest by telephone. Vest confirmed that he was the Toshiba manager overseeing Toshiba's procurement of VOIP long-distance services, which was part of a larger project to upgrade Toshiba's global network. Vest explained that Toshiba was looking to meet the needs of a call center in the United Kingdom that would be calling customers globally. In early October 2008, Vest also participated in telephone communications with Primus staff in Virginia about testing issues. 15. On October 2,2008, Primus delivered a proposed rate sheet to Mr. Bachmann, along with a copy of Primus' standard Master Services Agreement and Order form. 16. On or about October 10,2008, Vest sent a Credit Application form to Mr. Bachmann, and signed it on behalf of Toshiba as its I.S./I.T. Senior Manager. This Credit Application was later forwarded to Primus. 17. On November 10,2008, Mr. Bachmann ed to Primus a copy of the Master Services Agreement signed by Vest on behalf of Toshiba as its I.S. & I.T. Manager, bearing markings indicating that the signed document was FAXed from Toshiba's London office.

6 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 6 of 20 PageID# Between November 10 and 17,2008, Primus' Mr. Barker in Virginia and Vest had multiple telephone communications regarding the need for Toshiba to also sign the Order form and rate sheet. 19. On November 17,2008, Primus staff in Virginia participated in a conference call with Vest and "Mark Jones" in which the final details of the Primus-Toshiba contract and arrangements were discussed. Vest presented Mr. Jones as being associated with Toshiba, and Mr. Jones provided a Toshiba address (mark.jones@toshiba-toel.com). 20. Later on November 17,2008, Primus received the remaining documentation necessary for it to begin service, namely the rate sheet initialed by Vest and the Order form signed by Vest as Toshiba's I.S. and Communications Manager. 21. A true copy of the Master Services Agreement (with the accompanying rate sheet and Order form) is attached as Exhibit A. 22. Primus began providing service to Toshiba on November 18,2008. In providing its services, Primus utilized its global telecommunications system, which is controlled by facilities within the United States. Most of the Primus staff who control and operate the telecommunications system are located at Primus' headquarters in McLean, Virginia. 23. Afterwards, Vest had frequent communications by telephone and with Primus employees located in Virginia. Among other matters, he provided assurances that the telephone traffic being sent to Primus was generated by Toshiba and its operations. 24. On November 25, 2008, Mr. Sajil Urumbath, an employee of Primus' United Kingdom affiliate, visited Toshiba's main office on the 6th floor, 100 Ludgate Hill, in London, and met with Vest. During their conversation, Vest confirmed that he was the person who had signed the Master Services Agreement with Primus on behalf of Toshiba. Vest added that

7 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 7 of 20 PageID# 7 Toshiba had entered into the agreement in order to have one vendor satisfy all of its carrier requirements and because it was cheaper for Toshiba to have a U.S.-based company provide this service. Vest also assured Mr. Urumbath that the traffic being carried by Primus for Toshiba was being generated by Toshiba and its operations. At the meeting, Vest provided Mr. Urumbath with a business card. The card identified Vest as Toshiba's I.S. and Communications Manager, and listed his Toshiba telephone number ( ), FAX number ( ), and e- mail address (richard.vest@toshiba-toel.com). 25. During subsequent business days, there were frequent conference calls between Vest and Primus employees located in Virginia. 26. Because the volume of Toshiba traffic was greater than Primus had originally expected, Primus' Thomas Kloster (who is its Chief Financial Officer, based in Virginia), contacted Vest and asked to discuss a revision to the credit terms, which under Paragraph 4.2 of the Master Services Agreement required payment by Toshiba within 30 days of the date of each monthly invoice. In response, Vest told Thomas Kloster that he should contact "Shakeel Tandel," whom Vest identified as a Global Accounts executive with Toshiba responsible for billing and credit matters. Vest stated that Mr. Tandel could be contacted by telephone at , which is close to Toshiba's main office number ( ). 27. On November 27,2008, Mr. Kloster called Mr. Tandel's direct dial number provided by Vest, and left Mr. Tandel a voic message. Mr. Kloster received a return call from Mr. Tandel, who informed Mr. Kloster that he should contact Toshiba's "Peter Thorns" about billing issues related to the Master Services Agreement. Mr. Tandel identified Mr. Thorns as Toshiba's Chief Financial Officer, and informed Mr. Kloster that Mr. Thorns could be reached

8 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 8 of 20 PageID# 8 at Mr. Thorns' telephone number ( ) only differed by a few digits from Toshiba's main office number ( ). 28. On November 27,2008, Mr. Kloster placed a telephone call to Mr. Thoms at and left a voic message. Mr. Kloster received a return telephone call from Mr. Thoms on or about November 28,2008. During this conversation, Mr. Thoms assured Mr. Kloster that he was aware of the Master Services Agreement between Primus and Toshiba that had been executed by Vest and knew about the telephone traffic being carried by Primus for Toshiba. 29. During Mr. Kloster's telephone call with Mr. Thoms, Mr. Kloster told Mr. Thoms that Primus required prompt payment for Primus' services in November. Mr. Thoms stated that he would try to see if payment could be made by December 15,2008, but made no firm commitment. 30. Subsequently, Mr. Kloster placed a telephone call to Toshiba's main number and asked for Mr. Thoms. The receptionist who answered the phone stated to Mr. Kloster that no one by the name of Peter Thoms worked at Toshiba. Later during this conversation, the receptionist asked Mr. Kloster if he was calling on behalf of Primus. After Mr. Kloster confirmed that he was calling on behalf of Primus, the receptionist transferred Mr. Kloster's call to Vest. Upon information and belief, Vest arranged for Toshiba's receptionist to transfer to him callers seeking to talk with Mr. Thoms. 31. At the request of Primus' Mr. Kloster, on December 1,2008, a conference call was held between Vest, Mr. Thoms, and Primus representatives including Mr. Kloster. The telephone traffic from Toshiba was discussed. Vest and Mr. Thoms represented themselves as managers of Toshiba, and stated that Toshiba was generating the telephone traffic being

9 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 9 of 20 PageID# 9 delivered to Primus for termination at various destinations. Vest and Mr. Thoms also said that the Toshiba receptionist needed to be trained better. Vest also sent Primus a new Credit Application, which listed Toshiba's bank and account number. 32. On December 2,2008, Mr. Brian Miranda (Chief Financial Officer of Primus' United Kingdom affiliate) personally went to Toshiba's main office in London, with the intention of delivering to Mr. Thoms Primus' invoice (dated December 1,2008) for $2,098,158.82, corresponding to the amount due for the services provided by Primus under the Master Service Agreement during the month of November When Mr. Miranda arrived at Toshiba's offices, he first asked to speak with Mr. Thoms. Two individuals that Mr. Miranda spoke with at Toshiba's offices stated that they did not know of Mr. Thoms. Mr. Miranda then asked to meet with Vest and was directed to a conference room in which Vest soon arrived. 33. Mr. Miranda handed Vest a copy of the December 1,2008 invoice. A copy of this invoice is attached as Exhibit B. Under the Master Services Agreement, payment was due on this invoice within 30 days of December 1,2008, in the amount of $2,098, During Mr. Miranda's meeting with Vest on December 2,2008, Mr. Miranda asked to meet with Mr. Thoms. Vest stated that Mr. Thoms only works out of Toshiba's London office two to three times a month because Mr. Thoms also serves as Chief Financial Officer for the Middle East and other regions in addition to Europe. In response to an inquiry from Mr. Miranda, Vest explained that Toshiba's 98,000 employees, and its contractors and call centers generated the telephone traffic that Primus was carrying for Toshiba pursuant to the Master Services Agreement. 35. At the end of the meeting with Mr. Miranda, Vest stated that he would arrange a telephone conference between Primus executives in Virginia and Mr. Thoms, to take place on 9

10 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 10 of 20 PageID# 10 December 3,2008, to discuss Toshiba's payment for services rendered by Primus under the Master Services Agreement. Mr. Thorns did not join the conference call at the scheduled time. On December 3,2008, Primus suspended its circuits providing the VOIP call termination service. 36. Primus made other efforts (not involving Vest) to contact higher-level managers or directors of Toshiba. Primus finally succeeded in doing so on December 3,2008, when it was advised by Mr. Patrick Whelan (a Toshiba director) that Vest is a Toshiba manager. A meeting was arranged for the next day, December 4,2008, between Primus and Toshiba representatives other than Vest. 37. Toshiba's Vice President and General Manager (Mr. Shunsuke Nonami), along with others from Toshiba, attended the December 4,2008 meeting with Primus, held via teleconference. On December 12,2008, Mr. Nonami advised Primus in writing that Vest did not have actual authority on behalf of Toshiba to enter the Master Services Agreement. He also advised that Toshiba had not generated the "substantial volume" of calls indicated in Primus' invoice dated December 1, On December 16,2008, Primus sent Toshiba an invoice, dated December 14, 2008, for $727, for the services provided under the Master Service Agreement between December 1,2008 and December 3,2008 when Primus suspended the service. A copy of this invoice is attached as Exhibit C. Payment is due on this invoice within 30 days of the invoice date. 39. On December 16,2008, Primus also sent to Toshiba a letter requesting payment of the December 1,2008 invoice no later than December 31,2008, along with another copy of that invoice. That invoice is now overdue and has not been paid. 10

11 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 11 of 20 PageID# On information and belief, neither "Mark Jones," "Tim Scott," "Shakeel Tandel," or "Peter Thorns" are or were genuine Toshiba employees or agents. Vest falsely represented to Primus that they were Toshiba employees, and used his managerial authority at Toshiba to supply them with Toshiba addresses and telephone numbers. COUNTI (Breach of Contract against Toshiba) 41. Primus incorporates by reference paragraphs 1 through 40 of this Complaint, as if fully stated herein. 42. Toshiba is contractually bound by the Master Services Agreement executed by Vest. Vest had either actual or apparent authority to execute that contract on Toshiba's behalf. 43. Toshiba cloaked Vest with apparent authority to enter the Master Services Agreement on behalf of Toshiba by appointing him as Information Services and Communications Manager, which is a position that normally carries with it the authority to enter contracts such as the Master Services Agreement. Toshiba also reinforced that apparent authority by providing Vest with business cards bearing his managerial title; providing him with a Toshiba telephone number at its main office and an address which listed his managerial position; providing him with data about Toshiba's telephone calling data, which Vest provided to Mr. Bachmann for forwarding to Primus; providing him with an office at Toshiba's London main office; allowing a Toshiba receptionist to forward to Vest the telephone call placed by Mr. Kloster to Mr. Thorns; giving Vest the managerial ability to assign Toshiba addresses and/or telephone numbers to other persons such as "Mark Jones," "Tim Scott," "Shakeel Tandel," and "Peters Thorns;" and otherwise to hold himself out as authorized to enter the Master Services Agreement. 11

12 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 12 of 20 PageID# Primus reasonably believed that Vest had actual or apparent authority based on all of the factors listed in the preceding paragraph, and based upon Primus' diligence in verifying Vest's employment at Toshiba and contacting Vest there before the Master Services Agreement was executed. 45. Toshiba's failure to pay Primus for the amount due under the December 1,2008 invoice within 30 days constitutes a breach of contract. Toshiba is now contractually obligated to pay all amounts due under that invoice. 46. In addition, Primus seeks a declaratory judgment pursuant to 28 U.S.C. Section 2201 that Toshiba is obligated to pay the amount due under the December 14,2008 invoice within thirty days of that invoice. Given Toshiba's failure to pay the December 1,2008 invoice when due, Primus reasonably anticipates that Toshiba will likewise not pay the December 14, 2008 invoice when payment becomes due. 47. As a result of Toshiba's failure to pay amounts due under the Master Services Agreement, Primus has suffered and continues to suffer damages. 48. Toshiba is obligated by contract to pay Primus $2,825, for Usage Charges under the Master Services Agreement, plus 1.5% per month in interest for all amounts past due as provided under Paragraph 4.4 of that Agreement. 49. Under Paragraph 4.4 of the Master Services Agreement, Toshiba is also required to pay Primus' attorneys fees and other collection costs incurred by Primus in this action. COUNT II (Fraud against Vest and Toshiba) 50. Primus incorporates by reference the averments in paragraphs 1 through 49 of this Complaint, as if fully stated herein. 12

13 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 13 of 20 PageID# Vest knowingly made numerous false representations to Primus that induced it to enter into the Master Services Agreement, and afterwards to continue furnishing telecommunications services totaling $2,825, in value. 52. To the extent that Toshiba did not grant Vest actual authority to enter into the Master Services Agreement, all of Vest's communications to Primus (whether made directly or conveyed through Mr. Bachmann or others) from September through November 17, 2008, were intentionally false and misleading, and intended to mislead Primus into believing that Vest had actual authority to enter the Master Services Agreement on behalf of Toshiba and that Toshiba would pay for such services. 53. On information and belief, in the September to December 2008 period, Toshiba never had any intention to procure from Primus or any other vendor all of the services eventually provided by Primus under the Master Services Agreement. Vest's contrary representations to Primus were intentionally false and misleading. 54. Vest knowingly and falsely represented prior to and on November 17,2008 that he had actual authority to sign the Master Services Agreement on behalf of Toshiba and that Toshiba would willingly pay for services thereunder. 55. Primus was fraudulently induced by the foregoing misrepresentations to enter the Master Services Agreement and to provide services thereunder. 56. All of Vest's communications with Primus after November 17,2008 were false and misleading, and aimed at causing Primus to continue to supply services under the Master Services Agreement while knowing that Toshiba had not actually authorized such services. 57. On information and belief, Vest falsely represented that persons he identified as "Tim Scott," "Mark Jones," "Shakeel Tandel," and "Peter Thomas" were Toshiba employees or 13

14 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 14 of 20 PageID# 14 agents. Vest also falsely represented that the telephone traffic being carried by Primus was all generated by Toshiba and its operations. 58. Primus reasonably relied on Vest's misrepresentations when deciding to enter into the Master Services Agreement with Toshiba, and when providing VOIP call termination service through December 3, Vest acted with malice when he made his false and misleading representations to Primus. 60. By reason of its justified reliance on Vest's false representations, Primus has suffered damages of at least $2,825,466.16, plus interest and the costs of this action. 61. Toshiba is vicariously liable for damages suffered by Primus as a result of Vest's fraud because Toshiba placed Vest in a position where he could, acting apparently within his authority, perpetrate the fraud upon Primus in his capacity as Toshiba's Information Services and Communications Manager. Primus reasonably believed that Vest was acting within the scope of his authority when Vest signed the Master Services Agreement and subsequently provided reassurances to Primus. In addition, Toshiba is vicariously liable for Vest's actions under the principle of respondent superior because Vest was acting within the scope of his employment when he entered the Master Services Agreement for Toshiba and afterwards communicated with Primus. 62. Primus acted with reasonable diligence to discover the fraud and take actions to prevent additional damages. Primus succeeded in discovering the fraud within fifteen calendar days of the commencement of VOIP service on November 18, Vest's conduct in fraudulently inducing Primus to enter into the Master Services Agreement, and afterwards in obtaining telecommunications services through deceit, was wanton 14

15 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 15 of 20 PageID# 15 and willful and with conscious disregard to Primus's rights. Accordingly, Vest is liable for punitive damages. COUNT HI (Violation of the Virginia Business Conspiracy Act, Va Code and against Vest and Toshiba) 64. Primus incorporates by reference the averments of paragraphs 1 through 63 of this Complaint, as if fully stated herein. 65. Vest and others (including persons known as "Tim Scott," "Mark Jones," "Shakeel Tandel," and "Peter Thoms") entered in a combination, agreement, and conspiracy for the purpose of willfully and maliciously injuring Primus in its business in violation of Va. Code Section (A). On information and belief, none of "Tim Scott," "Mark Jones," "Shakeel Tandel," or "Peter Thoms" were employees or agents of Toshiba. 66. Vest and his co-conspirators acted with malice by seeking, through deceit, to convince Primus to provide VOIP call termination service for Vest's benefit, and contrary to purposes that Vest had represented. Vest and his co-conspirators had no intention of making payment to Primus for its services and had no expectation that Toshiba would willingly make payment for those services. 67. Among the acts of Messrs. Vest, Scott, Jones, Tandel, and Thoms in furtherance of their conspiracy were the numerous false communications to Primus in Virginia alleged previously in this Complaint. 68. By reason of the actions of Vest, and the acts of other persons (including Messrs. Scott, Jones, Tandel, and Thoms, who on information and belief were not Toshiba employees or agents), Primus has sustained actual damages of at least $2,825,

16 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 16 of 20 PageID# Primus acted with reasonable diligence to discover the facts constituting the violation of the Virginia Business Conspiracy Act, and to take actions to prevent additional damages. Primus succeeded in discovering the facts underlying the violation within fifteen calendar days of the commencement of VOIP service on November 18, Toshiba is vicariously liable under the Virginia Business Conspiracy Act for Vest's actions because Toshiba placed Vest in a position where he could, acting apparently within his authority, unlawfully inflict at least $2,825, in damages upon Primus in his capacity as Toshiba's Information Services and Communications Manager. In addition, Toshiba is vicariously liable under the Virginia Business Conspiracy Act for Vest's actions under the principle of respondent superior because Vest was acting within the scope of his employment when he entered the Master Services Agreement for Toshiba and afterwards communicated with Primus. 71. Pursuant to Va. Code Section (A), Vest and Toshiba are each jointly and severally liable for three-fold the damages to Primus, equal to at least $8,476,398.48, plus (a) interest and (b) the costs of this action including a reasonable fee to Primus' counsel. COUNT IV (Negligent Supervision against Toshiba) 72. Primus incorporates by reference the averments in paragraphs 1 through 71 of this Complaint, as if fully stated herein. 73. Toshiba hired and granted Vest authority to serve as its Information Services and Communications Manager. On information and belief, Toshiba granted him access to Toshiba's telephone and services, including the ability to create Toshiba accounts and telephone numbers. Toshiba also supplied Vest with access to data about Toshiba's telephone call volumes, provided him authority to instruct Toshiba's receptionist to transfer to him 16

17 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 17 of 20 PageID# 17 telephone calls from Primus placed to "Mr. Thorns," provided him with an executive office at Toshiba's main office, and provided him with access to information about Toshiba's bank account. 74. Toshiba had a duty to exercise due care in supervising Vest's utilization of the authority granted to him as Toshiba's Information Services and Communications Manager. 75. In recent years, managers employed by affiliates of Toshiba have engaged in unauthorized and fraudulent business transactions to benefit themselves individually. Toshiba was therefore on special notice of the need to provide proper supervision of its managers and to guard against fraudulent schemes. 76. Upon information and belief, Toshiba negligently breached its duty of care in supervising Vest by permitting him to perpetrate a fraud upon Primus. Toshiba did so by failing to (a) supervise Vest's activities in that position and his communications with Mr. Bachmann and Primus, (b) supervise his creation of Toshiba and telephone accounts, (c) supervise his instructions to a Toshiba receptionist, and (d) on information and belief, by failing to implement monitoring and training procedures to ensure that Vest was not engaged in misuse of his authority. 77. As a result of Toshiba's negligent supervision of Vest, Primus provided VOIP call termination service for the period of November 18, 2008 until December 3, 2008 worth $2,825, Toshiba has not paid the first invoice for $2,098,158.82, and Primus has therefore been damaged. That damage will increase by $727, if Toshiba does not pay the second invoice when it becomes due on or about January 15,2009. Toshiba is liable for damages in the aforesaid total amount of $2,825,466.16, plus other damages incurred by Primus, interest, and the costs of this suit including Primus' reasonable attorneys fees. 17

18 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 18 of 20 PageID# 18 PRAYER FOR RELIEF WHEREFORE, Plaintiff Primus respectfully requests that the Court: 1) enter a declaratory judgment pursuant 28 U.S.C that Toshiba is obligated by contract to pay the amount due under the Primus invoice dated December 14,2008 no later than January 15,2009; 2) enter a money judgment against each of the Defendants, jointly and severally, for: (a) actual damages to be proven at trial (no less than $2,825,466.16); (b) treble damages pursuant to the Virginia Business Conspiracy Act (no less than $8,476,398.48); (c) pre-judgment interest; (d) Primus' reasonable attorneys' fees and its costs of this action, and (e) such other and further relief as the Court may deem just and proper; and 3) enter a judgment against Vest for punitive damages in the maximum amount allowed by law. Respectfully submitted, Primus Telecommunications, Inc. By Counsel BRYAN CAVE LLP 700 Thirteenth Street, N.W. Suite 700 Washington, D.C (202) (phone) (202) (facsimile) weolson@bryancave.com BV: William E. Olson, VSB No DATED: January 6,

19 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 19 of 20 PageID# 19 OfCounsel Daniel I. Prywes (not admitted in Virginia) BRYAN CAVE LLP 700 Thirteenth Street, N.W. Suite 700 Washington, D.C (202) (phone) (202) (facsimile) 19

20 Case 1:09-cv LO-TCB Document 1 Filed 01/06/09 Page 20 of 20 PageID# 20 DEMAND FOR JURY TRIAL Plaintiff Primus Telecommunication, Inc. hereby demands a trial by jury in this action on all claims so triable. Dated: January 6,2009 Respectfully submitted, BRYAN CAVE LLP By:. William E. Olson (VA Bar. No ) Counsel for Plaintiff Primus Telecommunications, Inc. 20