Steve Heath was co-lead counsel, alongside Eric Beste of Barnes & Thornburg, LLP, in a lawsuit filed in the San Diego Superior Court for a China-based investor against a former employee accused of stealing $23 million deposited in U.S. corporate bank accounts. Following a seven-day bench trial, the Court awarded the firm’s clients $23 million in compensatory damages, $8 million in punitive damages, and entered a permanent injunction.
The dispute began in mid-May 2022, when the employee took control of four accounts over which she had co-signatory authority, transferred the funds to accounts she had recently opened, and began siphoning the funds to a separate entity she owned. After the clients filed their complaint, the employee tried to justify her misconduct through further acts of deception – claiming that the plaintiff-investor was an ‘imposter’ and that, in transferring the funds, the employee was acting under the instruction of the ‘real’ investor. The employee also filed in court various fabricated documents, included forgeries of Chinese government records, sought unsuccessfully to disqualify the firm as plaintiffs’ counsel, and at one point even filed a separate lawsuit against the firm to unsuccessfully coerce it into dropping the case.
Throughout the lawsuit, Heath Steinbeck showed that the employee repeatedly violated a temporary restraining order and a preliminary injunction by spending millions of dollars on high-end real estate, luxury automobiles, and other purchases, and engaged in various acts of intimidation against the plaintiffs and their counsel. Prior to trial, the clients obtained an order freezing $15 million of the stolen funds and recovered an additional $3.9 million. On November 2, 2023, the court entered a final judgment for the full amount that the employee had stolen, $23 million, also awarded the clients $8 million in punitive damages in light of the employee’s malicious conduct. The judgment also requires the employee to transfer to the clients real estate purchased with the stolen funds, and includes a permanent injunction forever barring the employee from engaging in any act in the names of the companies or the investor.