On Feb. 5, the Ontario Superior Court of Justice awarded over $180,000 in costs to a lawyer who was sued by a former client, finally bringing an end to a legal saga that has been going on for over a decade.
Steven Skurka started representing Canadian-Israeli businessman Nathan Jacobson in 2007, when Jacobson was indicted by the U.S. Department of Justice on a number of charges. Jacobson ended up pleading guilty to one of those charges – money laundering.
When Jacobson was later able to withdraw his guilty plea, and all the charges were eventually dropped, he decided to sue Skurka for over $27 million in damages, for what Jacobson claimed was pressure to plead guilty and negligent representation.
In a ruling on July 23, 2018, Judge Lise Favreau dismissed Jacobson’s suit against Skurka, saying in her decision that, “I am satisfied that Mr. Jacobson’s action does not raise any triable issues and that it is just and fair to grant summary judgement in Mr. Skurka’s favour.”
Jacobson was originally indicted on allegations that his credit card processing company, RX-Payments, was doing business with the online pharmacy company Affpower Enterprise. The U.S. government alleged that Affpower broke the law by selling prescription drugs to customers online, without in-person physician consultations.
Jacobson was one of 17 people charged in the case, and beyond money laundering, he was also charged with wire mail fraud, mail fraud, racketeering and distributing and dispensing controlled substances. Jacobson maintains that he was innocent the entire time and only plead guilty because he was pressured into do so by Skurka and his team. Jacobson ended up spending time in jail and forfeited $4.5 million to the U.S. government after pleading guilty.
The crux of the dispute between Jacobson and Skurka is the guilty plea that Jacobson submitted. While Jacobson said he was pressured into it by Skurka, Skurka argued that he and his legal team – which included Canadian lawyer Marie Heinen, who’s perhaps best known for representing Jian Ghomeshi, and American lawyer Patricia Holmes, who recently represented Jussie Smollett – provided the pros and cons of pleading guilty to Jacobson, who then decided to plead guilty of his own accord.
A meeting took place on Jan. 15, 2008, which Jacobson said was the precise moment when Skurka scared him into accepting the guilty plea. Both sides told Favreau their contrasting accounts about what occurred at the meeting. As Favreau wrote in her decision, “the issue of what happened at the meeting turns largely on credibility.”
In the end, Favreau sided with Skurka’s account. She said Jacobson had not produced any evidence of what happened at the meeting, while Skurka did have evidence, including a memo that Heinen had produced immediately after the meeting.
Favreau also questioned Jacobson’s credibility, because he had previously accused Skurka of being the subject of a criminal investigation and of conspiring with U.S. prosecutors to get a percentage of the money Jacobson forfeited, claims that Jacobson subsequently acknowledged were false.
“I have no doubt that Mr. Jacobson’s decision to plead guilty was a difficult and stressful one, and that he came to regret that decision. However, I do not see any basis for finding that Mr. Skurka placed undue pressure on him to plead guilty,” Favreau wrote in her decision.
Jacobson takes issue with a number of aspects of Favreau’s decision. One of them was her claim that he couldn’t be trusted because he had at one point plead guilty and then withdrawn the claim, despite being counselled that he should only plead guilty if he truly was guilty.
Jacobson said that her reading of the situation doesn’t take into account the tremendous amount of pressure that the U.S. legal system places upon people in his situation.
“You can’t imagine the pressure when you’re told that the charges against you are going to end up with your landing 130 years in jail. There were tens of charges against me. Everything but the assassination of Lincoln, they left that one out,” he said.
Skurka declined to answer questions about the decision, but did provide a short statement, saying that: “None of my colleagues or friends ever thought that this case had any merit. I am grateful that a respected judge has now said that. I was totally vindicated.”