Facts

In early 2001, defendant Golberg's representative in Moscow, Sergey Sergeev, offered plaintiffs a business line of credit (amount up to $300,000,000) from defendant Versailles Investments Corporation, a corporation of which Golberg was director and officer. To obtain the line of credit, Golberg required plaintiffs to pay a $3.5 million advance fee. Golberg's representative also offered plaintiffs an ownership interest in a joint investment bank, for a payment of $400,000.

The plaintiffs paid Golberg's company $3.9 million for the business line of credit and the alleged interest in a joint investment bank. The plaintiffs received nothing in return. Golberg did not reimburse plaintiffs any of their money, but instead converted the entire $3.9 million to his and his wife's own use.

The plaintiffs initially sued all defendants for breach of contract and various torts. At trial, the plaintiffs dismissed all claims except for conversion, intentional misrepresentation, and false promise. The plaintiffs prevailed on all three causes of action against defendant Golberg.

PLAINTIFF'S CONTENTIONS:
The plaintiffs contended that defendant Golberg intentionally defrauded them out of their money.

DEFENDANT'S CONTENTIONS:
Defendant Golberg contended that he kept the $3.9 million because defendant Sergeev owed him that amount and he understood the money to be Sergeev's repayment of the loan. Golberg further contended that plaintiffs fabricated their claim about the business line of credit and the joint investment bank, that he had never offered them either a line of credit or an interest in any bank, and that the $3.9 million that plaintiffs sent to Golberg was actually Sergeev's money, not plaintiffs. Defendant Golberg also contended that plaintiffs could not have reasonably relied on any information because they did not perform due diligence into the $300 million credit line. Defendant Golberg further contended that all of plaintiffs' claims were barred by the statute of limitations.

Result

The jury awarded $3.9 million in compensation damages plus prejudgment interest, totaling $6,076,516 as of May 5, 2009, against defendant Alexander Golberg. Punitive damages against defendant Alexander Golberg were stipulated by the parties in the amount of $750,000.

Other Information

The plaintiffs dismissed defendant Terri Coe Rebell before trial. According to the defense, plaintiffs also sought default judgments against defendants A.S.G. Consulting and Sergey B Sergeev. Defendant Golberg is expected to appeal the judgment. FILING DATE: Dec. 22, 2006.

Deliberation

two days

Length

nine days