There is a spot on the Indian River east of Orlando where the fish really byte. That’s because a defendant employee in a RICO case tossed her laptop into that river with millions of incriminating bits and bytes. Simon Property Group, Inc. v. Lauria, 2012 U.S. Dist. LEXIS 184638 (M.D. Fla. 2012). Defendant destroyed the evidence with that cast, but the plaintiff employer won anyway. Magistrate Judge Karla Spaulding begins her sanctions order in Simon with this summary:
This case has all the elements of a made-for-TV movie: A company vice president surreptitiously awards lucrative business deals to a series of entities that she and her immediate family members control. To cover up the egregious self-dealing, she fabricates multiple fictitious personas and then uses those fictitious personas to “communicate” with her employer on behalf of the entities she controls. She also cut-and-pastes her supervisor’s signature onto service agreements in an attempt to make it seem as if her activities have been approved. After several years, a whistleblower exposes the scheme to the company. The company then tells the vice president that she is being investigated and warns her not to destroy any documents [*5] or evidence. Sensing that her scheme is about to collapse around her and wanting to cover her tracks, the vice president then travels to the East Coast of Florida and throws her laptop computer containing information about these activities into a river.
Id. at *4.
There are many interesting electronic discovery aspects to this bizarre case, including the use of fictitious email addresses to create fake people, phony companies, and pretend business transactions. Defendant Lynnette Lauria, a senior manager and vice-president of her real employer company, also used the cut and paste feature in PDF software. She used this feature to make it seem like her supervisor had approved service agreements with her pretend companies. She would go around electronically cutting-and-pasting the signature of her superior at Simon onto the agreements to give the false impression that they had been approved. Id. at *11.
It is so easy to just make stuff up that seems real in the digital world. Lauria did just that to bilk her employer out of over three million dollars in fraudulent billings. She got away with it for several years until a whistle blower in the company came forward and tipped off senior management.
When defendant Lauria somehow learned about the whistleblower and an internal company investigation into her fraud she dreamed up yet another creative scam to try to derail the investigation. She purchased the domain name “simonpropertyinc.com.” Then she emailed the whistleblower from a “simonpropertyinc.com” address, pretending to be a Simon auditor and asking the whistleblower to send them all the information he had provided to Simon. Id. at *10.
This last scam was too little too late. Lauria received a preservation demand letter and knew she was likely to be sued. She then retained legal counsel and soon thereafter she was fired. The day after that, but still months before suit was filed, Lauria headed towards Satellite Beach from Orlando with the one computer on which all her fraudulent records and activities were stored. Id. at *13. You have to cross a river to get to the beach, where she admits she threw her laptop into the river. The opinion does not name the river, but having lived not too far away most of my life, and fished there a few times too, I can tell you it is the Indian River.
Strangely enough, after suit was filed and Lauria was deposed, she started telling the truth. Here is one of several deposition excerpts quoted in the Judge Spaulding’s opinion.
When asked why she threw the laptop away, Lauria testified as follows:
Q: Okay. Why did you throw the laptop away?
A: Because I knew that something was coming down and I just didn’t want all the stuff around.
Q: So you were trying to get rid of documentation and e-mails and things?
A: Uh-huh, yes.
Q: That directly related to the lawsuit?
A: Yes. Now, they do, yes.
Lauria Dep. at 32. Although Lauria threw the laptop into the river before Simon filed the instant lawsuit, she admitted that she knew that Simon was investigating her activities at the time that she destroyed the laptop. The record evidence further establishes that Simon had warned her not to destroy any documents [*15] or evidence. Id. ; Doc. No. 231-3 at 1-7.
Id. at *14-15.
Under these facts of pre-suit, intentional spoliation of evidence the court imposed the ultimate sanction and struck all of the defenses raised by Lauria. The District Court Judge Greg Presnell’s order dated January 15, 2013 confirmed and adopted Judge Spaulding’s order. The case was then scheduled for trial on the issue of the amount of damages. It should come as no surprise that just before the trial started Lauria filed for bankruptcy. The action now stands stayed, but I suspect it will arise again because fraud cannot be discharged in bankruptcy and this case is very fishy.