Timothy Kowal, Esq.
March 25, 2018

TVA's client is a born salesman and entrepreneur. Before Amazon and eBay were household names, he sensed the opportunities in the online marketplace and started his successful online stores in the early 2000s. But he could not have imagined the dystopian future that awaited him when he met and partnered with the defendant.

Defendant, an older businessman, also sensed the opportunities in the nascent online marketplaces. He boasted to TVA's client that he had connections to factories in China whose products would be wildly profitable when sold in the US. And Amazon had now made it possible for garage-upstarts to accomplish this in Fortune 500 volumes.

But the Defendant needed someone like TVA's client, because the Defendant did not speak English, and did not have an Amazon store or understand inner workings of the online marketplaces.

So in 2009, TVA's client agreed to sell the Defendant's products through his Amazon store, which he did in huge volume. TVA's client also agreed to join the Defendant and his partner's company. The client successfully developed a sales staff and procured a number of wholesale customers for the products that the Defendant imported from China.

But then things took a dark turn. In 2011, their offices were raided by ICE on suspicions of contraband products imported from China. TVA's client was arrested. The Defendant, however, had fled to China the day before. The client and his new wife were expecting their first child later that year, and so pleaded no contest in exchange for a nine-month probation, accepting responsibility for the Defendant's mistake. Suddenly realizing the kind of person he had partnered with, TVA's client began looking for a way out.

By early 2013, TVA's client and his wife started a new venture, selling products made in America. While still in the process of transitioning his online operations to the new business, the client's fears were confirmed when he found more contraband product in the Defendant's office. Knowing there were no second chances for him, the client immediately tendered his resignation, cutting all ties with the Defendant, who was in fact arrested in 2015.

The client's prudence kept him out of prison, but he left behind the profitable business operation he had developed and invested his savings in. The Defendant spun these operations out into a new company. With the sales staff TVA's client had trained and the procedures he had developed, the business continued to enjoy enormous success… for the Defendant. Meanwhile, TVA's client was back at square one and struggling to support his growing family.

TVA met the client through the best kind of referral: the recommendation of the vanquished. TVA had recently protected a client's business against a similar takeover attempt by an older businessman, and the son of that disappointed businessman happened to be a neighbor of the client. Having been on the receiving end of TVA's efforts, he recommended the client call TVA.

At trial, TVA showed the jury how its client had started and built his online marketplace operation, and how he had partnered with the Defendant to help build his wholesale operation. The Defendant, however, insisted the whole operation was one -- that the client's business had become the Defendant's, "the same way as I use my nose, my eyes." On the other hand, the Defendant also insisted TVA's client could not own the company -- instead, a mysterious Chinese company did!

The jury awarded verdicts to TVA's client on every one of his claims: for stealing his company, diverting his customers, looting his assets, and fraudulently transferring his operations to a new company. The jury awarded TVA's client $7.4 million to restore what the Defendant had defrauded him out of. And when the jury was shown that the Defendant was paying himself $35,000 monthly rent for a new warehouse purchased with the companies' own money, the jury awarded $2.5 million in punitive damages against him.

TVA recovered a total verdict of just under $10 million. This was the largest verdict in the state of California in 2018 for fraudulent transfer, conversion, and breach of fiduciary duty.