BOLIVAR, Mo. – Late lawyer Randy Gori and former partner Barry Julian once won $30 million in punitive damages for a fraud that cost them less than $100,000.
Polk County jurors awarded $20 million to Gori in 2013, on a loss of $88,898. They awarded $10 million on a $10,000 loss for Julian, currently an associate judge in Madison County.
The record doesn’t show that Gori and Julian collected on the verdict, but it shows that they tried to use it to their advantage in separate criminal proceedings.
They sought priority over victims who lost greater amounts, but the tactic failed.
In 2009, Benjamin Schmickle of their firm told them he and his father and others invested in commodities through his brother Eric Schmickle of Bolivar.
Gori and Julian each entrusted $10,000 to Eric Schmickle, and Gori invested $60,000 more through February 2011.
They agreed that Schmickle would take half the profit, with 60 percent of the other half taxable as long term capital gains and 40 percent as short term.
Schmickle moved to Wisconsin in 2012.
On April 27 of that year, he confessed to federal agents that he lost about $3 million on trades and misappropriated about $1.7 million.
Gori and Julian sued him in Polk County on May 16, 2012, claiming he tried to conceal and transfer assets including his residence.
They claimed his last statement falsely showed Gori’s account at $165,043.12, and Julian’s at $33,002.31.
Gori claimed he not only lost his $70,000 investment but also paid $18,898 in tax on income Schmickle falsely reported.
He and Julian each sought $500,000 in punitive damages.
On July 18, 2012, at U.S. district court in Milwaukee, prosecutors filed criminal information and a plea agreement.
On Sept. 24, 2012, at district court, the U.S. Commodity Futures Trading Commission sought penalties and an injunction.
The commission claimed Schmickle accepted at least $5.3 million from at least 10 individuals, half of it from a single client.
On Oct. 29, 2012, Polk County Circuit Judge John Sims granted summary judgment to Gori and Julian for recovery of their losses.
He reserved punitive damages for a jury.
Gori and Julian moved to set a trial date on Dec. 3, 2012, claiming they would be prejudiced if it wasn’t set at the earliest possible date.
Sims set trial the following May.
He retired at year’s end, and Circuit Judge Michael Hendrickson took the case.
On Jan. 2, 2013, Gori and Julian moved to expedite the trial.
Hendrickson granted the motion and set trial Feb. 19, 2013.
On Jan. 8, 2013, Schmickle challenged the $500,000 claims for punitive damages.
“Plaintiffs have not and cannot in any way show harm that would merit a punitive award of over five times the award for damages in the case of plaintiff Gori and fifty times for plaintiff Julian,” Schmickle wrote.
On the trial date, Schmickle filed a letter stating he was unable to defend himself due to lack of time, money, and ability.
“I humbly concede the case on these grounds and am willing to accept a default judgment for the full amount or whatever the court deems acceptable without any further action,” he wrote.
Trial took less than a full day.
Hendrickson instructed jurors to award “such sum as you believe will serve to punish defendant and to deter defendant and others from like conduct.
“You may consider harm to others in determining whether defendant’s conduct was outrageous.”
Jurors retired at 3:09 p.m., and reached agreement in 32 minutes.
Hendrickson entered judgment for $30 million the next day.
On Feb. 26, 2013, in Milwaukee, District Judge Rudolph Randa sentenced Schmickle to 36 months.
On April 19, 2013, Schmickle and the commodities commission filed a consent order setting a civil penalty of $1,500,000 and restitution of $3,604,068.56.
On June 15, 2013, the U.S. served notice that it would condemn certain property of Schmickle’s investment entity, Aquinas.
The property consisted of cashier’s checks worth about $45,000, checks worth about $18,000, and bank accounts with unknown amounts.
On July 26, 2013, Gori and Julian filed a petition asserting superior interest.
Joseph Trad of St. Louis wrote that Gori and Julian filed a lawsuit against Schmickle in Missouri before the criminal case was commenced.
“Absent the government’s intervening forfeiture action, petitioners would have already exercised their fiduciary and other legal rights and pursued collection actions to recover any transfers from Aquinas that were used by defendant to obtain the assets subject to forfeiture,” Trad wrote.
He requested that the property be released to Gori and Julian or that their interest be fully satisfied before any proceeds were disbursed to any other party.
Randa set a hearing on Sept. 26, 2013, but it didn’t happen.
Gori and Julian withdrew the petition on Aug. 30, 2013.