CHALLENGING THE SLIME MACHINE.

When you have the facts, you talk the facts, when you have the law, you talk the law; when you have neither, you sling slime.

In a March 1999 article in The Boston Globe, “Holocaust victim” Misha Defonseca was quoted as saying that because of me (her publisher) she was so destitute she was reduced to eating dog food. Subpoenaed bank records later revealed that, just days before, she had withdrawn $10,000 in cash. That’s a lot of Alpo.

But the damage was done. That article, and similar others, will live in perpetuity on the Internet and to an unknown extent in people’s dim memories. “Oh, isn’t she the publisher that cheated those authors?” people say when they hear my name.

I have been living under a barrage of slime for more than a decade, and it’s extremely painful. The Defonseca/Lee slime machine lately has stepped up broadcasting their deliberate misinformation in an attempt to shore up the crumbling justification for their grotesquely huge verdict.

Just how grotesquely huge? Let’s look at the damages in my case compared with some other lawsuits.

My tiny publishing company and I were sued by two unknown authors for various breaches of contract. The two were awarded over $33 million in damages, plus all rights to a book that went on to become an international bestseller.

A couple of comparisons:

Thirty-three million dollars is the same amount as that awarded to the families of the deceased in the wrongful death suit against OJ Simpson for the brutal killings of his wife and her friend.

In a typical personal injury suit, a 39-year-old New Jersey psychiatrist and father of two died as a result of infection following a botched gall bladder operation. That suit settled for $4.6 million.

The huge damages in my case are a sure indication of what really influenced the proceedings: A tremendous outpouring of sympathy for two plaintiffs who played their parts very well. Misha Defonseca was an emotionally and physically crippled Holocaust victim. She appeared in court with an ankle-to-hip leg brace and a cane. Her fellow plaintiff was ghostwriter Vera Lee, a sweet little old lady. Both claimed they were cheated and exploited by their unscrupulous publisher. Together they presented a very touching, and very false, picture.

Their book, “Misha A Memoire of the Holocaust Years” was admitted into evidence and the judge and jury had an opportunity read it. Many people, including Elie Wiesel, described the story as “very moving” and certainly it had its effect on the outcome of the trial. The tone of righteous outrage that bristles from the 25 pages of the trial court’s Findings of Fact is worthy of the Nuremberg Trials.

And outrage about what, exactly? Money? Let’s look at the money.

Vera Lee’s lawyer admitted in his opening statement that I never took a salary; my compensation was to be the sweat equity I built up in the company. I worked on the Misha project from 1995 to 2001, five years with no pay.

In summer 1998, Vera Lee’s lawyer obtained a court ruling to have Mt Ivy’s earnings escrowed by the court. (At the end of the trial the court paid Mt Ivy’s escrowed earnings to Defonseca and Lee.) Just a year after publication of the book, with its income frozen, Mt Ivy was sinking under the weight of legal bills.

The court consistently twisted the financial evidence against Mt Ivy and me. For instance, the court acknowledged in its Findings that I had loaned the company money. I testified that I had loaned $17,000 more than I was reimbursed. Defonseca and Lee offered no rebuttal. Yet the court found that my loans to cover legal fees (incurred because of Defonseca’s and Lee’s lawsuits) were an indication that Mt Ivy was an under-funded, “sham” company.

All earnings, including foreign earnings held in a foreign account, were duly reported in the royalty statements that were admitted as trial exhibits. Back-up records of all earnings, including the foreign income, were attached to the royalty statements. Yet the righteously indignant trial court dismissed it all, saying Mt Ivy “refused to provide accountings.”

The royalty statements speak for themselves. You’ll notice, if you check his public statements, Lee’s attorney never says he discovered unreported earnings, although that is what he clearly implies. “She diverted revenues to an offshore bank account which we did locate,” Mr. Frisoli says in an interview for WCVB’s Chronicle.

The truth is, what he located was the foreign bank where the foreign earnings (which he knew about from the royalty statements) were deposited. Having all but killed Mt Ivy, Mr. Frisoli was frustrated that he couldn’t finish the job by attaching those remaining funds, thereby destroying our ability to mount a legal defense.

Today, the Defonseca/Lee camps continue to beat the drum of moral outrage by citing other incongruous findings from the trial court. Vera Lee’s lawyer has told the media that Misha and his client were never paid. “She [Jane] didn’t pay royalties,” he says, over and over.

What he doesn’t say is that before the trial, a different judge three times upheld Mt Ivy’s contractual right to withhold royalties pending determination of whether the co-authors failed to meet their obligations. (The trial court, in its ire, simply disregarded the previous court’s repeated rulings and found that Mt Ivy had “no legal or legitimate basis for withholding royalty payments.”)

Mr. Frisoli also has publicly stated that Mt Ivy’s foreign bank account held funds from the sale of movie rights. This is pure fabrication, and he knows it. “Daniel placed ‘hundreds of thousands of dollars’ from book and movie sales in a [foreign company,]” he told a reporter for the Milford Daily News.

As a matter of fact, the only reference to hundreds of thousands of dollars in the Findings of Fact is the money discovered in Defonseca’s bank accounts. (See below.) Apparently, Mr. Frisoli is not satisfied with the trial court’s damning (though unsupported) findings against Mt Ivy; he is now manufacturing his set own set of findings and attributing them to the court.

Another example: Contrary to Mr. Frisoli’s statements that the court found I had “stolen” money, nowhere in the Findings of Fact does the word “steal, stole or stolen” appear. (Note to the next reporter to cover this story: Please ask Mr. Frisloli to show you where in the Findings of Fact the court says what he says it says.)

Mr. Frisoli’s casual attitude toward the truth is not limited to financial matters. During last summer’s hearing, when my lawyer explained to the court that Defonseca had publicly confessed that her story was false, Mr. Frisoli sprang to his feet to defend her. “She didn’t say she lied,” he protested. He then explained that she suffered from recovered memory syndrome, like a child who was sexually abused.

There’s no question that the language of the trial court’s findings was scathing. But if you look for the substance behind the rhetoric, it’s not there. For instance, the trial court found that Mt Ivy and I “used breaches of contract as a lever to misappropriate funds” and “fraudulently pilfered monies” [owed to Defonseca and Lee.]

The vagueness of this language evades the fact that a prior court three times held that NO royalties were due to Defonseca and Lee pending resolution of the lawsuit. We acted in accordance with multiple rulings of a prior court, and were slammed by the trial court for doing so. As for “fraudulently pilfered”, “pilfer” is not a term of law. (The dictionary says it means to “filch a small amount.”)

Here’s my point: The trial court offered no details to support a finding of fraudulent pilfering or misappropriating. This is what the trial court did:

THE TRIAL COURT DID SAY I MISAPPROPRIATED “FUNDS” OR “MONIES.” THE TRIAL COURT DID IMPOSE A $33 MILLION VERDICT.

One would think a judgment of that impressive size would require a proportionally thorough explanation of the evidence and the facts that supported it. It didn’t happen. This is what the trial court didn’t do:

THE TRIAL COURT DID NOT IDENTIFY WHICH “MONIES” WERE MISAPPROPRIATED, HOW MANY DOLLARS THAT REPRESENTED, THE SOURCE OF THOSE MONIES, WHEN THEY WERE TAKEN, ANY SUPPORTING PAPER TRAIL, OR THE FORM (CASH? CHECKS?) IN WHICH THE MONIES WERE MISAPPROPRIATED. THE TRIAL COURT DID NOT IDENTIFY ANY MISSING MONEY.

The reason for these critical omissions in the trial court’s findings is this:

THERE WAS NO MISSING MONEY.

All earnings were accounted for. No money went to me except for repayments of loans.

(Note to the next reporter to cover this story: Please do your fact checking. Ask Mr. Frisloli to supply documentation for all his statements. As for me, I would be more than happy to provide back-up for everything I’ve written here.)

Misha Defonseca testified at trial that she was impoverished because of her publisher, causing her to lose her home. The trial court found that Defonseca’s home was foreclosed.

Public records, however, prove the Defonsecas sold their home for a profit shortly before the trial. And although Defonseca bypassed the usual reporting mechanisms by having royalties from the French translation direct-wired into her bank accounts, subpoenaed bank records told even more of the story. From the Findings of Fact:

“The Defonseca’s three bank accounts reveal deposits between December 1996 and February of 2000 of over $243,700. The evidence never made clear how, notwithstanding that amount of deposits, the Defonsecas were claiming financial hardship, such that their home was foreclosed upon in 2001.”

The evidence WAS clear: Misha was NOT impoverished. Maurice Defonseca himself testified that Misha earned over $150,000 directly from publication of the American book. The finders of fact, however, were so intent upon reaching their pre-determined destination that they galloped over a mountain of irrefutable evidence that was right in front of them.

In his opening statement of the trial, Mr. Frisoli told the jury, “Follow the money.” He dropped that line from his closing, but let’s take his advice anyway:

The trial court found that “Mt Ivy declined to promote the Work on the Oprah Winfrey Show…in a wrongful attempt to gain all rights to Defonseca’s story.” Further it found that, had Mt Ivy properly promoted the book, Defonseca would have earned $1 million, and Lee half a million dollars, in royalties.

Thus, according to the royalty schedule in the Publishing Agreement, Mt Ivy’s share of the total earnings would have been over $8 million. In other words, the trial court found that Mt Ivy intentionally walked away from $8 million for — WHAT REASON!?! The court never explains how an appearance on the Oprah Winfrey Show could have had any effect on the rights to Misha’s story.

Today, we know for sure why the Oprah show never happened, and it had to do with Misha’s hidden agenda, not Mt Ivy’s. The real reason Misha didn’t go on Oprah was tied to her need to kill the American book. (More on that coming soon.)

There’s one more money issue I want to address: People often ask, What happened to the $33 million?

The answer is: There WAS NO $33 million.

That amount is what was determined to be the VALUE of the DAMAGES (monetary and otherwise) incurred by Defonseca and Lee because of their publishers’ “extremely egregious” conduct. The jury imposed $11 million and the court trebled it to over $33 million — a number that, we now know, was awarded for a pack of lies.

STAY TUNED …