California Judge Awards Monetary Damages to Investors Charles, Michael Schwab in Libel Suit

LOS ANGELES (Feb. 27, 2024) – A California judge has awarded $6 million in compensatory and punitive damages to father-son investor duo Charles and Michael Schwab in two high-profile libel suits after the man accused of smearing them through various media platforms failed to appear for multiple court hearings.

Judge Bruce G. Iwasaki, Superior Court of Los Angeles County, entered the default judgment against failed businessman Nicholas Behunin, ending a ten-year legal battle and elaborate scam conducted by the defendant and his two companies. Behunin, who had already been found liable of attempting to defraud the Schwab family in a separate $15 million civil suit last year, failed to appear for a court-ordered deposition and other scheduled hearings over the last several months.

Evidence gathered over the course of the case showed that Behunin and his former attorney, Leonard Steiner, conspired to create a smear campaign against Michael and Charles Schwab for the purpose of forcing the Schwabs to settle a spurious lawsuit against them seeking $25 million. Records show Behunin paid a Huffington Post columnist $10,000 to write a column falsely accusing Michael Schwab of money laundering and misappropriating funds from a charity for personal profit. The columnist later acknowledged in writing that the article contained factual errors regarding Michael Schwab.

Behunin and Steiner’s defamatory campaign also included the creation of a website that published numerous lies and falsehoods about the Schwabs’ alleged business dealings with the former dictator of Indonesia. Steiner and his law firm settled his portion of the lawsuit in August, agreeing to make a substantial cash payment and issue an apology to Michael and Charles Schwab. The plaintiffs requested that the settlement funds be dedicated to legal ethics training for lawyers on the use and limits of publicity in litigation.

“We are pleased to see the court hold Mr. Behunin accountable for his actions and send a strong message on the consequences that are sure to come with this type of reckless behavior and attempted character assassination,” said Robert Moore, attorney from Allen Matkins. “As Mark Twain famously said, a lie can travel halfway around the world while the truth is still putting its shoes on. Justice moves at a slower pace, but once all the facts came to light the falsehoods perpetrated by the defendants quickly unraveled. The fact that Mr. Behunin no-showed these hearings tells you everything you need to know about his claims and this case.”

Behunin initially hired legal counsel before later deciding to represent himself. His last court appearance was in July 2023 with his most recent address being in Colombia, according to court records.

“This was a long fight, but it had to be fought. Justice, and the truth, has prevailed,” said Michael Schwab. “We feel vindicated knowing the court ruled in our favor on every legal contest for the duration of this case, as well as the fraud trial that was decided last year. Our attorneys at Allen Matkins and the Law Offices of David H. Schwartz, Inc. did a masterful job presenting this case, and we are gratified to know that this result will support much needed ethical training for the legal profession.”

The decade-long legal saga stems back to a lawsuit filed by Nicholas Behunin against Charles and Michael Schwab in 2014, which came on the heels of Michael Schwab’s decision to stop investing in Behunin’s pursuit of a reef barrier construction project after he learned Behunin was misrepresenting his work and presenting fictitious contracts. A judge threw out the case in 2017 for lack of merit, with all claims against the Schwab family and their investment firm, Big Sky Venture Capital, being dismissed. The Schwabs filed a countersuit against Behunin for fraud and breach of fiduciary, with a jury awarding the family $15 million in damages in April 2023.

Allen Matkins and the Law Offices of David H. Schwartz, Inc. represented the Schwab family and Big Sky Venture Capital. Official court records for the case can be found at lacourt.org under case numbers BC 573709, BC 574505, and BC 546925.

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About Allen Matkins Law Firm

Allen Matkins, a law firm with more than 250 attorneys, was founded with deep roots in real estate and has leveraged that foundation to grow and build prominent litigation, corporate, tax, labor and employment, land use, and environmental practices allowing us to partner with clients across myriad industries and markets. For more than 45 years, Allen Matkins has worked with clients drawn to us by our reputation for market leading solutions, pragmatism, exemplary quality, approachability, and our unparalleled network of contacts and connections in business and government. For more information about Allen Matkins please visit www.allenmatkins.com.

About Law Offices of David H. Schwartz, Inc.

The Law Offices of David H. Schwartz, Inc., has been representing individuals and small businesses throughout California in complex business and commercial litigation for over 35 years. The firm has handled major cases in the areas of director and shareholder disputes, trade secret misappropriation, business fraud, civil RICO, will and estate contests, breach of contract, and defamation. For more information please visit www.lodhs.com.