Stanton Schnepp v. Andrew Altchek and Jose Luna

Jose Luna convinced Stanton to invest $100,000 with Mr. Luna and Mr. Altchek. The money was to be invested in a business that made short term bridge loans. In fact, there were no bridge loans. Mr. Luna and Mr. Altchek kept the money. It was a classic Ponzi scheme in which Altchek employed Luna as a finder. Luna would bring "investors" to Altchek and receive a fee. For every $100,000 investor he brought to Altchek he received $33,000. For every $50,000 investor Luna brought in he received only $5,000.

Luna denied being a part of the scheme and claimed to have been innocently duped by Altchek along with Mr. Schnepp and many others. In his deposition and on the witness stand in trial Luna claimed to have invested money as well and to have been paid back only $150,000, a fraction of what he gave Altchek. I located and produced bank records at the trial. The records proved Luna had given Altchek only $50,000 and received more than $238,000 in payments from Altchek. Using bank records I was able to match "investments" by Mr. Schnepp and others to payments to Mr. Luna by Altchek. The amounts Luna received were based upon the amount of money the duped persons invested; Luna received his payoff the same day or shortly after Altchek received the funds.

We sued Luna for conversion (essentially a claim for theft which is made not in criminal court but in civil court) and for intentional misrepresentation, omission of facts and negligent representation. We sued Altchek for intentional misrepresentation, omission of facts and negligent representation. We sued Altchek for intentional misrepresentation, omission of facts. The jury awarded Mr. Schnepp $200,000 against Altchek and $180,000 against Luna. The judge ruled after the trial that the amounts should be reduced to $100,000 against Altchek and $50,000 against Luna. The reason he gave was that the jury awarded Shnepp $30,000 for conversion. However, once Schnepp's funds were in Altchek's bank account the balance in the account varied. Therefore, Mr. Schnepp's money could no longer be distinquished from other funds. According to the judge the balance variation precluded the award of the conversion damages. The jury awarded Mr. Schnepp $50,000 for each of the three fraud counts, intentional misrepresentation, omission of facts and negligent representation. According to the judge such an award was a "stacked" award and was precluded.

In talking to the jurors it was clear that they sought to punish and deter the defendants by awarding Mr. Schnepp more than he invested. However, the jurors failed to style the excess award as punitive damages, which allowed the judge to reduce it.

Not long after the end of this eight day jury trial, one of the witnesses who had also been defrauded by Luna and Altchek retained our firm to file suit. In light of the outcome Mr. Luna quickly settled the matter. Suit against Altchek would be fruitless because he was in federal prison and without assets.