An Atlanta, Georgia jury has returned a $9.2 Million award against AME Financial Corp. and its CEO, James L. Pefanis, in a sexual harassment case.  The jury was required to take the plaintiff’s allegations as true after the federal judge issued a default verdict in favor of the plaintiff based upon the court’s finding that the defendants had submitted a fraudulent affidavit in support of their defense of the case.  The allegedly fraudulent affidavit stated that another former employee never witnessed the CEO sexually harassing the plaintiff.  When the plaintiff’s counsel tracked down the former employee in Texas, he signed an affidavit for the plaintiff in which he denied ever signing the allegedly fraudulent affidavit.  The allegedly fraudulent affidavit was apparently the straw that broke the camel’s back as the court had previously sanctioned the CEO’s real estate lawyer and the CEO’s accountant for failing to turn over documents in discovery.

             The jury was not told about the fraudulent affidavit.  The judge simply read portions of the plaintiff’s complaint to the jurors (four men and four women) and told them that they must accept as true the allegations of gross sexual misconduct, which included the CEO groping the plaintiff and exposing himself in the workplace, and that those actions were intended to humiliate and demean the plaintiff.  The jury returned a verdict of $1.7 Million in compensatory damages and $7.5 Million in punitive damages.

             Forsberg v. Pefanis, Civil Action No. 1:07-cv-03116-JOF-RGV in the United States District Court for the Northern District of Georgia, Atlanta Division.