Couple get judgment in finance fraud case
A Spokane couple who planned to build a resort on Lake Pend Oreille near Sandpoint have gotten an $18.2 million default judgment against a Seattle-area man who promised to help find financing for the project.
Orthopedic surgeon Dr. Alex Verhoogen and his wife, Mary Lee Verhoogen, who jointly operated Swan’s Landing LLC, got the judgment this month in Spokane County Superior Court against Robert Stilnovich, who was president of Universal Online Inc.
The Verhoogens filed suit last year against Stilnovich, Universal Online and its other officers, J. William Oldenburg, of Seattle, and Duane Moore, of Reno, Nev.
The suit alleged fraud and breach of contract.
Stilnovich did not respond to the complaint and failed to show up for a court hearing before the Verhoogens, represented by Spokane attorney Mary Schultz, moved for the default judgment that was signed March 2 by Superior Court Commissioner Joseph Valente.
In addition to the principal judgment amount of $18.2 million, the court awarded an additional $4.6 million in interest, $39,000 in attorney fees and just over $1 million in non-economic loss – all against Stilnovich.
“We’re going to try to collect this judgment against Mr. Stilnovich,” Schultz said Monday. “In fact, the processes are under way.”
Schultz wouldn’t elaborate but said such default judgments in fraud cases are non-dischargeable in bankruptcy court.
Oldenburg and Moore have retained attorneys and deny the allegations of wrongdoing contained in the Verhoogens’ lawsuit. A January 2008 trial date tentatively is scheduled.
In their lawsuits, the Verhoogens said in November 2002 they were involved in building a recreational lodge, known as the Inn at Swan’s Landing, which was to adjoin a successful restaurant the couple had owned and operated since 1998.
“The plaintiffs had fully paid for the restaurant and land known as ‘Swan’s Landing,’ and had invested some $5.1 million into the adjoining hotel project,” the complaint said.
The plaintiffs, their suit said, “were servicing debt of some $1.8 million for existing loans for construction and land for the hotel project.”
In February 2003, the Verhoogens traveled to Seattle for meetings with Oldenburg who “touted his financial expertise, experience, background and success in procuring multimillion-dollar financing.”
The offices and home Oldenburg used for the Seattle meetings “were being rented or used for the purpose of show,” the complaint said.
Oldenburg is a self-described “self-made billionaire,” who owned the LA Express, a team in the US Football League, and boasted of signing quarterback Steve Young to a $40 million contract, according to the complaint.
Oldenburg asked for a $150,000 retainer before he would secure $23 million in financing for the Swan’s Landing project within 45 days. The Verhoogens signed the agreement and got a personal loan to pay the retainer. Under the agreement, the Verhoogens were prohibited from seeking financing from other sources.
The defendants missed a series of dates when they promised to deliver the financing to the Verhoogens, who were facing the threat of foreclosure by mid-2003, their suit said.
“By mid-December 2003, due to the defendants’ failure to produce any loan commitments” and the prohibition on the Verhoogens going elsewhere, foreclosure actions had begun on the couple’s restaurant and hotel property.
“The defendants never produced any loan funding for the plaintiffs whatsoever,” the suit said.
“Since then, the plaintiffs have discovered that Oldenburg has been historically involved in significant litigation as well as criminal proceedings related to fraudulent activity on his part in loan brokering,” the suit said.