Former Guess CEO Loses Big in Defamation Lawsuit

Former Guess. Inc. Chief Executive Officer George Marciano was ordered to pay over $370 million to five former employees of Guess in a defamation suit filed after they were accused of stealing millions in artwork and funds.

From Fraud to a Defamation Suit

Marciano originally sued for embezzlement and fraud in 2007, accusing his former employees of stealing e-mails and other personal information and conspiring to sell art and wine from his collection. Marciano inflated the amount stolen from $60 million to $413 million over time. The employees responded with cross-complaints, alleging libel and harassment by the French designer.

A former accountant for Marciano named Miriam Choi stated that the harassment dated back to 2006, when she was yelled at for her work and placed on leave while his finances were being audited. Marciano filed a criminal complaint for grand theft against Choi and a co-worker in the same year. According to Choi, her former boss continued to libel her in e-mails and letters for more than a year. Another employee, Steven Chapnick, told the Los Angeles Times that he had difficulty finding a job after Marciano sent out letters accusing him of fraud.

Marciano’s “Crusade for Justice”

Los Angeles County Superior Court Judge Elizabeth White dismissed Marciano’s suit this past December, after Marciano did not cooperate with pretrial proceedings or show up for scheduled depositions. In May, White found that Marciano was liable for defamation and intentional infliction of emotional distress on each cross-complainant.

Following the liability trial, White scheduled a jury trial for damages that occurred on July 20. During the trial, Marciano made a “surprise” appearance in court and took the stand, although he had never been subpoenaed. He told the jury that he was on a crusade for justice and did not intend to stop. The jury found Marciano liable to each of his former employees for $74 million, with the charges totaling over $370 million.

Since White ruled against him in the liability trial, Marciano has been publicly campaigning against the judge on the streets of Los Angeles. He had people stand outside the Los Angeles courthouse with a banner that slandered the judge. The protests have been incorporated into his run for governor, including news released accusing White of bias. He also sued her in federal court for constitutional violations.

Marciano sold his stake in Guess to his three brothers and left the company in 1993. He announced his intention to run for California governor earlier this year.

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