A real estate fraud case alleged against Facebook CEO Mark Zuckerberg has settled out of court, his attorney said Wednesday.
The case, which was to go to trial in April, was settled between Zuckerberg and plaintiff Mircea Voskerician and involved no money, Zuckerberg's attorney, Patrick Gunn, said.
Voskerician, a Palo Alto developer, sued Zuckerberg in May 2014, claiming that the Facebook co-founder committed fraud when he bought out a contract to purchase a property adjacent to his home at a deep discount in exchange for promises for business introductions. But Zuckerberg's attorneys say he never had any such agreement and the developer is just looking to extract more money and embarrass their client.
Voskerician said in court papers that he made an offer on the property at 1457 Hamilton Ave. in November 2012, after learning it abuts Zuckerberg's backyard. He planned to build a large home on the site that would have been only 31 feet away from Zuckerberg's house, according to the lawsuit, which was filed on May 2, 2014, in Santa Clara County Superior Court.
He approached Zuckerberg with an offer to sell approximately 2,600 square feet of the property to increase a buffer zone between the two structures. Through his real estate agent, Zuckerberg said he wanted instead to purchase the entire Crescent Park property.
Voskerician and Zuckerberg eventually did come to an agreement to buy out Voskerician's contract with the property owner -- for $1.7 million plus $129,000 in deposits the developer had put down on the property. But Voskerician claimed that Zuckerberg had agreed to give him business referrals that did not materialize.
Zuckerberg's financial adviser allegedly told Voskerician in front of Zuckerberg that the Facebook CEO gave his company business and introductions to new clients in return for discounted services. The agent asked if Voskerician would give Zuckerberg a discount. Voskerician asked Zuckerberg if he wanted a discount on the property. Zuckerberg allegedly said "yes," and that he could not pay $4.3 million for the property, according to the lawsuit.
Zuckerberg allegedly stated that he built Facebook on relationships and connections. In exchange for a discount he would introduce Voskerician to his friends, clients and associates and promote Voskerician's business by giving him referrals for new business and written references. The lawsuit alleges that Zuckerberg also offered to help Voskerician build the home he intended for the site at a different location.
Voskerician accepted a $1.7 million contract buy-out on Dec. 5, 2012, in exchange for the promises of personal references and business promotions from Zuckerberg. But after the deal, Voskerician tried to set up protocol for the business referrals. Zuckerberg was unresponsive, despite multiple attempts to contact him, according to court papers.
Gunn, Zuckerberg's attorney, told the Weekly after the lawsuit was filed that there was never any oral or written agreement regarding the promised business contacts, and the written contract-assignment agreement had the input of lawyers for both sides.
"We think this is a manufactured claim. The meeting he describes is not the meeting that took place. It appears to be a claim that has just been invented in order to extract even more money from our client. If the plaintiff's version of events were true and these alleged promises were actually made, I would think they would've been included in writing, and they were not," Gunn said.
On Wednesday, Gunn said he could not disclose the terms of the settlement, but it involved no payout of any kind to Voskerician.
"The discovery process revealed that Mr. Voskerician was relying on doctored evidence to support his case. Mr. Voskerician's decision to abandon his lawsuit confirms what we have always maintained, that his claims lacked merit and his case was nothing more than a fraudulent attempt to extort millions of dollars from Mr. Zuckerberg. We are pleased this years-long harassment has come to an end and that the plaintiff will see no financial gain from his misconduct," Gunn wrote in an email.
Voskerician's attorney, Guyton Jinkerson, filed the dismissal request with the court on March 15.
"Since I appeared in this case in January of 2016, my client and I have reviewed the factual and legal premises that his former counsel pursued. Upon careful reflection we determined that this case should be resolved and we worked with counsel for the defendants to reach an equitable settlement of this matter. We are pleased that the parties have been able to bring an end to this litigation," Jinkerson wrote in an email.
In October 2013, Zuckerberg purchased three other properties neighboring his Crescent Park neighborhood home and said that he had done so after discovering that a developer was going to build a huge house directly behind his property and use Zuckerberg as a selling point to increase the sales price for the new home. Zuckerberg had wanted to thwart the use of his name and preserve his privacy, media reports at the time stated.