Former Sequoia partner wins blackmail lawsuit against ex-lover

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(Bloomberg) – A violent three-year lawsuit between a former Sequoia Capital partner, a former exotic dancer, and a promised $ 40 million secret money payment has ended.

A California Supreme Court judge ruled in favor of venture capitalist Michael Goguen and found that his former mistress Amber Laurel Baptiste had committed fraud and extortion when threatening to make false claims, including the fact that he was sexually transmitted to her Infection. The judge asked Baptiste to repay the full $ 10.25 million she received from Goguen. After a three-day trial that Baptiste did not participate in, the court also approved an injunction to protect Goguen and his current wife, Jamie Goguen.

Unless there is no objection by the end of next week, the decision of December 20 is final and concludes a saga that rocked Silicon Valley's gossip and put Goguen's two-decade investment career at one of the world's most prestigious companies to an end. Baptiste's allegations emerged as the #MeToo movement took shape and tightened control over executive misconduct. The decision is a rare moment of salvation for a powerful man accused of sexual misconduct.

Baptiste said she stands by any allegation she made in her initial lawsuit and plans to appeal the decision before the deadline. She said she had already spent nearly $ 5 million of the money Goguen had given her on legal fees and was hiring her sixth lawyer. "I will continue to fight until the end," said Baptiste.

Goguen said over the phone from his home in Whitefish, Montana, that the verdict closed a "heartbreaking and devastating" chapter of his life. He said many friends and colleagues had treated him "like a leper" since Baptiste went public with her allegations in 2016. Even after defeating Baptiste's original lawsuit in September, the scandal hindered Goguen's efforts to operate his new VC fund. Goguen stopped and did not celebrate the verdict as a victory. "I'm exhausted," he said.

At Sequoia, Goguen specialized in finding and funding technology startups specializing in networking and cybersecurity. Initial public offers and sales of some of these companies to Cisco Systems Inc. provided wealth to Goguen and the VC company. Baptiste's suit in 2016 had an immediate impact: Sequoia removed Goguen from the company's website and removed it from the boards of 11 companies. Sequoia said at the time that the allegations against Goguen were "unproven and unrelated to the company". "Still, we decided that his departure was reasonable," said Sequoia. A company spokeswoman declined to comment on the new verdict.

Goguen and Baptiste said they met at the strip club in Dallas in 2002 where they worked and they started to spend time together. In 2014, Goguen paid Baptiste $ 10 million in the first of four installments to break communication and keep details of her affair and other allegations secret.

In her 2016 complaint, Baptiste claimed that Goguen had sexually abused her for over a decade, infected her, and then waived her promise to pay the full $ 40 million. Goguen countered, called the matter amicable and accused her of extortion. Goguen claimed that he stopped paying her for violating her contract by continuing to contact him and then breaking her confidentiality agreement with her lawsuit.

Baptiste soon separated from her lawyer and claimed that Goguen's lawyers worked with a private detective to persecute her. She said Goguen used his wealth and power to overwhelm her.

Last year, Goguen defeated Baptiste's suit before being tried. A judge ruled in September that Baptiste had provided no evidence to support her allegations or had undergone the mental and physical exams required by the court.

In the December ruling on Goguen's counterclaim, judge Danny Chou ruled that Baptiste had falsified the date and results of medical tests accusing Goguen of giving her the infection. He found that Goguen had agreed to the payment to prevent Baptiste from making false claims and creating a “media circus”.

Chou also found that Baptiste had fraudulently requested donations from Goguen to a non-profit organization called Every Girl Counts. The organization was supposed to help feed, dress and house three dozen young girls. Baptiste, however, did no such service and instead spent more than $ 40,000 on the charity to commission his own fantasy paintings.

Seeing the counter suit was a necessary step to clarify his name, said Goguen. After defeating Baptiste's suit a few months ago, Goguen said that the conclusion had the opposite effect that he had expected. Silicon Valley Bank and an angel investing group refused to work with him because, although the allegations were incorrect, they did not want to invite negative reporting, Goguen said.

Goguen hopes the new ruling will calm the matter. He said that if Baptiste repaid the money, he would donate it to charity. Goguen is now focusing on his Montana-based VC company Two Bear Capital. He said he deposited $ 15 million in the first fund to support seven startups. He has no plans to return to Sequoia or Silicon Valley.

The case is Baptiste v. Goguen, CIV537691, Supreme Court of California, San Mateo County (San Mateo).

(Updates with Baptiste's comment in the fourth paragraph.)

Contact the reporter about this story: Lizette Chapman in San Francisco at lchapman19@bloomberg.net

How to contact the editors responsible for this story: Mark Milian at mmilian@bloomberg.net, Peter Blumberg

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