A Fairfax County court has entered a $2.8 million judgment against the former comptroller of Steve Smith Pontiac, who was accused of mismanaging and embezzling company funds.
The judgment against Jay M. Peterfreund, a Washington area accountant, was entered in a consent decree in the Circuit Court for the County of Fairfax.
The decree settles civil charges in the case. A criminal charge of embezzlement is still pending against Peterfreund.
The embezzlement charge is under review by the Commonwealth's Attorney's Office in Fairfax, according to Steven M. Garver, the Reston lawyer representing Steve Smith Pontiac and its parent company, Rainbow Automotive Corp.
Raymond Brownell, the assistant commonwealth attorney handling the Peterfreund case, could not be reached for comment yesterday despite repeated phone calls to his office.
Peterfreund declined comment on the pending criminal charge. But he said his willingness to enter a consent decree in the civil matter, which concerned the alleged mismanagement of funds and misuse of company property, was solely a matter of expediency.
"I admit nothing, and the fact that he got a judgment means nothing," Peterfreund said. Peterfreund said he voluntarily sought a consent decree in the civil litigation "because I don't have the money to pay a lawyer" for extended litigation.
Garver said he doubts that Peterfreund has the money to pay the judgment and that "It's probably going to take many, many years for him to pay it."
The judgment granted Rainbow Automotive $840,000 in compensatory damages and $1.6 million in punitive damages. It also called for payment of $100,000 in compensatory damages and $250,000 in punitive damages to Smith.
Peterfreund called the court order "an empty judgment."
"I have nothing in terms of material items. I have no house. I have no car.
"I have nothing that he can get," he said of the consent agreement in the bitter dispute.
Peterfreund accused Steve Smith, president and chief executive of Rainbow Automotive, of trying to destroy him because of disagreements arising from what, several years ago, was regarded by some area dealers as the beginning of a bright business partnership.
Smith denied that he was engaged in a vendetta against Peterfreund.
"How can he say that?" Smith asked. "I offered him 8 percent of the company," when Steve Smith Pontiac opened in Fairfax in 1984, he said. "He wrote checks to himself and he falsified profits" to inflate bonus payments, Smith said. "That's theft," Smith said.
The Fairfax City Police Department charged Peterfreund with embezzlement on July 3, 1986, citing an incident that allegedly occurred on March 26 of that year.
On that date, according to the lawsuit, Peterfreund allegedly wrote himself a $3,750 check on the account of Steve Smith Pontiac and then cashed it.
"All this will do is destroy my life," Peterfreund said of news generated by the $2.8 million judgment and the repetition of the allegations.
"I have worked very hard to build a new life for myself, and all this will do is destroy it."