David Jaroslawicz, Plaintiff, v. Shimshon Mandel, Defendant. (2026)

BACKGROUND

In this shocking case of deception and fraud, defendant Shimshon Mandel stole more than $2 million dollars from plaintiff David Jaroslawicz. Between 2011 and 2017, plaintiff paid over $3.6 million pursuant to an agreement with defendant for an interest in a life insurance policy and during that time the agreement was followed. Commencing in 2017, defendant ceased paying premiums to the life insurance carrier, and permitted the policy to lapse, but began providing forged invoices to plaintiff and continued receiving payments of an additional $2.2 million dollars between 2017 and 2019. Ultimately, defendant was prosecuted in federal court, pleaded guilty to one count of conspiracy to commit wire fraud in 2023, was sentenced in 2024 to a prison term of one year and one day, and ordered to pay restitution of $2,283.552.40.

In this action, commenced in June 2024, plaintiff seeks damages from defendant for fraud and breach of contract. On May 14, 2025, plaintiff was granted partial summary judgment on liability on both causes of action, and the matter was sent to this jurist for a bench trial on damages. Prior to the trial, the parties stipulated to certain undisputed facts, and a trial was held over two days in March 2026.

The crux of the dispute in this matter is whether plaintiff was made whole by the restitution payment ordered by the federal district court, or whether he is entitled to additional damages, including interest and punitive damages.

Plaintiff contends that the restitution was inadequate compensation for the fraud because it did not account for interest or the opportunity lost to plaintiff. Plaintiff also contends that defendant did not sufficiently pay his debt to society and that a significant punitive damages award is warranted. On the other hand, defendant argues that plaintiff's claims are not well founded in the law, and that plaintiff has already been fully compensated, and defendant has paid his debt to society.

FACTS

In September 2008, defendant's late wife, Esther Mandel ("Esther") purchased a life insurance policy (the "Policy") from Reliastar Life Insurance/ING (n/k/a Voya Financial) (the "Insurance Company") on the life of her aunt, Tekla Lefkovits, containing a death benefit of Ten Million dollars ($10,000,000.00).

In the first year, the annual premium for the policy was $640,800, and there was no premium for the second year. For years 3 through 11, there was an annual premium of $535,569.90. After such time, additional premiums at a comparable rate to Year 11 would be required to continue coverage.

Defendant managed the Policy on behalf of Esther. Over time, defendant and Esther had increasing difficulty paying the premiums on the Policy. In August 2011, while the life insurance policy was valid and in effect, defendant and Esther entered into an Agreement with plaintiff dated August 3, 2011(the "Agreement") pursuant to which Plaintiff would assume responsibility for making premium payments on the Policy in exchange for (i) 80% of the death benefit under the Policy if the insured died before August 1, 2012, or (ii) 85% of the death benefit under the Policy if the insured died after August 1, 2012.

Under the Agreement, defendant and plaintiff agreed that Esther would remain the owner of record of the Policy, but plaintiff would provide defendant with quarterly premium payments due under the Policy, which defendant would then pay to the Insurance Company. Pursuant to the Agreement, plaintiff remitted funds to defendant to make payments of the Policy premiums.

Between August 2011 and November 2019, plaintiff sent defendant the total amount of $5,963,868.71 with payments made as follows: a) August 4, 2011: $91,325.96; b) October 10, 2011: $112,952.70; c) December 29, 2011: $108,680.84; d) April 23, 2012: $110,730.60; e) July 9, 2012: $110,782.00; f) October 22, 2012: $130,189.52; g) January 16, 2013: $130,000.00; h) April 17, 2013: $130,000.00; i) July 22, 2013: $130,000.00; j) January 21, 2014: $150,044.86; k) April 10, 2014: $150,035.25; l) July 15, 2014: $150,055.41; m) October 22, 2014: $171,184.96; n) April 13, 2015: $170,714.15; o) April 15, 2015: $170,714.15; p) July 15, 2015: $170,762.09; q) October 14, 2015: $187,159.91; r) January 7, 2016: $187,576.44; s) April 11, 2016: $188,188.55; t) July 12, 2016: $188,988.53; u) October 6, 2016: $181,607.96; v) December 7, 2016: $147,687.90; w) February 7, 2017: $205,832.23; x) May 2, 2017: $205,102.90; y) July 8, 2017: $203,403.83; z) November 1, 2017: $212,827.31; aa) January 31, 2018: $213,136.29; bb) May 2, 2018: $218,757.91; cc) August 6, 2018: $218,772.68; dd) October 23, 2018: $237,865.36; ee) January 29, 2019: $238,747.31; ff) May 8, 2019: $238,644.90; gg) July 31, 2019: $241,927.30; hh) November 12, 2019: $259,468.91.

Beginning with the payment he received from plaintiff by check dated July 8, 2017, defendant did not pay the Insurance Company, resulting in termination of the Policy on September 5, 2017 due to nonpayment of premiums. Yet, plaintiff continued to give defendant money to pay the insurance premiums on the Policy. In fact, the last premium payment sent on to the insurance company was May 2017.

In October 2018, plaintiff asked defendant if Defendant knew of a buyer for the Policy. Then, in March 2019, plaintiff advised defendant that Plaintiff had an opportunity with a German bank to buy the Policy. In November 2019, defendant told plaintiff that defendant had a ready, willing and able buyer for the policy and that the buyer would pay $5.5 Million to plaintiff to take over the Policy. The buyer defendant purportedly attempted to secure did not ultimately pay plaintiff for the Policy.

Despite the termination of the policy, based on the fake invoices generated by defendant, from July 8, 2017, to November 12, 2019, plaintiff sent funds totaling about $2,283,552 to defendant to pay amounts supposedly due to the Insurance Company.

On January 28, 2023, the United States Attorney filed a sealed indictment in the United States District Court for the Eastern District of New York (the "EDNY") commencing a criminal case against defendant captioned United States of America v. Shimshon Mandel.

On April 3, 2023, the Government filed a Superseding Information in the Criminal Case, which contained a charge of conspiracy to commit wire fraud. On August 7, 2023, defendant pleaded guilty to the Superseding Information at a plea hearing before a Magistrate Judge for the EDNY. At the Plea Hearing, defendant admitted that between August 2017 and October 2019 he "knowingly conspired with his wife to devise a scheme to defraud and to obtain money and property by means of materially false representations. For the purpose of executing such scheme, we caused to be transmitted fraudulent documents by means of wire communications in interstate commerce." (EDNY Hearing 8/7/2023).

He added: "In September of 2008 my wife Ester Mandel took out a $10 million life insurance policy on her 82-year-old aunt, Tekla Lefkowitz. Our plan was to pay the substantial premiums and then collect the payout when she passed. However, the premiums were very high and we could not keep up with the payments, so in August of 2011 we entered into an agreement with Mr. David Jaroslawicz where he would take over the premium payments and receive 85 percent when the policy was paid out. My wife would receive 15 percent. However, the fall of 2017, we were in financial trouble, and instead of using the money that Mr. Jaroslawicz gave us to make the quarterly payment to the insurance company, my wife and I used some of the money for other purposes, so I didn't have enough to make the quarterly premium payment. As a result, insurance company cancelled the policy.

I tried everything to have the policy reinstated, but I was unable to do so. We panic and we concealed from Mr. Jaroslawicz the fact that the policy had been cancelled. In order to hide the fact that the policy had been terminated -- in order to hide -- it's twice the same thing. In order to hide the fact that the policy had been terminated, we -- each quarter we agreed to email Mr. Jaroslawicz fake invoices which appeared to come from the insurance company showing the amount due for each quarterly premium. From October 2017 to October 2019, we agreed to email Mr. Jaroslawicz nine fake invoices totaling $2,283,552. None of that money was paid for the insurance company but was kept by us."

On February 14, 2024, the EDNY entered judgment against defendant in the Criminal Case, ordering a sentence of imprisonment for one year and one day, supervised release for one year, and restitution in the amount of $2,283,552.40.

On or about May 7, 2024, plaintiff received $2,283,422.40 in restitution and on or about May 27, 2025, plaintiff received $130 in restitution. On that same date, May 27, 2025, Tekla Lefkovits, Esther's Aunt and the named insured under the Policy, died.

DISCUSSION

I. Statute of Limitations

Defendant argues that this action, filed in June 2024, is untimely because the statute of limitations for breach of contract is six years from the date of breach (see, CPLR 213[2]), and the breach of contract occurred in July 2017. Similarly, as to the fraud claim, defendant notes that the limitations period is the greater of six years from the date the fraud is committed or two years from when the fraud was or reasonably should have been discovered, citing CPLR 213[8]. In that regard, defendant notes that plaintiff admitted during his deposition that he discovered the fraud in October of 2020 and thus should have filed the claim by October 2022.

Defendant was convicted of one count of conspiracy to commit wire fraud under 18 United States Code 371, which is a felony. Pursuant to CPLR 213-b, as a victim of a crime for which defendant was convicted, plaintiff may commence an action against defendant within ten years from the date of conviction for the crimes specified in Executive Law § 632-a(1)(e).

Specifically, CPLR 213-b provides:

Notwithstanding any other limitation set forth in this article or in article five of the estates, powers and trusts law, an action by a crime victim, or the representative of a crime victim, as defined in subdivision six of section six hundred twenty-one of the executive law, may be commenced to recover damages from a defendant: (1) convicted of a crime which is the subject of such action, for any injury or loss resulting therefrom within seven years of the date of the crime or (2) convicted of a specified crime as defined in paragraph (e) of subdivision one of section six hundred thirty-two-a of the executive law which is the subject of such action for any injury or loss resulting therefrom within ten years of the date the defendant was convicted of such specified crime.

The crimes specified in Executive Law § 632-a(1)(e) include 1) a class B felony offense defined in the penal law; 3) " an offense in any jurisdiction which includes all of the essential elements of any of the crimes specified in clauses (A) through (F) of this subparagraph," where the victim or perpetrator was a resident of New York at the time of the offence. The crimes listed in clauses A through F include grand larceny in the second and fourth degrees, and "an offense defined in the penal law that is titled in such law as a felony in the first degree."

Here, the elements of the crime of grand larceny in the first degree, a B felony, were met by defendant's conduct in stealing more than a million dollars (see PL 155.42). The elements for both second and fourth degree grand larceny are also established (see PL 155.30, 155.40).

Accordingly, this action is timely as it was commenced well within ten years of the defendant's 2023 conviction.

II. Fraud

The parties don't dispute that plaintiff suffered damages from the fraud committed by defendant. In fact, they generally agree that he was damaged in the amount of $2,283,552.40, which is also the amount paid in restitution.¹

The question remains whether plaintiff established such damages in this action. The parties' stipulation, as well as plaintiff's credible testimony and accompanying exhibits admitted into evidence, including copies of checks, a list of checks, bank deposit slips and money transfer instructions, established plaintiff suffered damages in the amount of $2,283,552.40. Yet, it is also true that the evidence and stipulation demonstrates that this sum was repaid in restitution in 2024.

The "out-of-pocket rule" compensates plaintiffs for what they lost due to fraud, not what they might have gained (Lama Holding Co. v Smith Barney Inc., 88 NY2d 413 [1996]). In other words, the goal of damages on a fraud claim is to put the plaintiff back where they were before the fraud. Stated differently, the "recovery of consequential damages naturally flowing from a fraud is limited to that which is necessary to restore a party to the position occupied before commission of the fraud" (Alpert v. Shea Gould Climenko & Casey, 160 AD2d 67, 71-72 [1st Dept 1990])).

Here, plaintiff was damaged in the amount of $2,283,552.40 due to the fraud and that is the amount necessary to restore him to his position before the fraud was committed. Yet, plaintiff does not ask this Court to award a duplicate damage award to that which was already repaid in restitution.

In sum, the Court finds that plaintiff has proven damages of $2,283,552.40 due to the fraud. Therefore, such amount is awarded. The Court is, of course, not ordering that such amount be paid a second time.

More significantly, the plaintiff seeks interest on the amount of fraud damages, noting that such interest was not awarded in the criminal matter, and that, pursuant to CPLR 5001[a], he is entitled to such prejudgment interest as a matter of law. He maintains that this award is necessary to restore him to his position before the fraud was committed.

There is no question that CPLR 5001 [a] provides that prejudgment interest shall be recovered and that the date from which it shall be computed is in the court's discretion. The Court of Appeals has explained:

The principle behind prejudgment interest is that the breaching party should compensate the wronged party for the loss of use of the money (see NML Capital v. Republic of Argentina, 17 NY3d 250, 266 [2011]). We have previously stated that "interest is not a penalty" (Love v. State of NY, 78N.Y.2d 540, 544 [1991]), and the purpose of ordering statutory interest on amounts in escrow is not to punish the breaching party. The breaching party is required to pay interest despite lacking possession or enjoyment of the property in order "to make [the] aggrieved party whole" (Spodek v. Park Prop. Dev. Assoc., 96 NY2d at 581).

(J. D'Addario & Co., Inc. v. Embassy Indus., Inc., 20 NY3d 113, 117-118 [2012]).

Further, prejudgment interest is appropriately awarded for fraud damages (see Huang v. Sy, 62 AD3d 660 [2nd Dept 2009]; see also Whittemore v. Yeo, 117 AD3d 544 [1st Dept 2014]). The Court has considered and rejected defendant's contrary position on interest.

Although the defendant has paid the fraud damages via the restitution order, this Court sees no proper basis to in effect penalize plaintiff by not awarding prejudgment interest. The purpose and principle behind prejudgment interest have not changed and apply equally here. Plaintiff should be fully compensated for the loss of the use of his money and such an award is necessary to make him whole. Indeed, had plaintiff only pursued recovery in this civil action and not contacted the authorities leading to the criminal conviction, there is no question that plaintiff would have proved fraud damages and been entitled to prejudgment interest. Accordingly, prejudgment interest is awarded although the Court recognizes that the restitution was paid.

Notably, Penal Law § 60.27 (6) provides that the payment of restitution or reparation as part of a criminal disposition " 'shall not limit, preclude or impair any liability for damages in any civil action or proceeding for an amount in excess of such payment.' " The amount of money paid by a criminal offender as restitution must be deducted from the amount of damages otherwise due to the crime victim in the subsequent civil proceeding to avoid the possibility of a duplicative civil recovery (see City of New York v Coll. Point Sports Assn., Inc., 61 AD3d 33, 46 [2d Dept 2009]). Here, the Court's order ensures no duplicative recovery and grants damages in excess of the restitution payment in the form of interest.

As to the date from which it shall be calculated, plaintiff suggests that interest may be calculated from the date of each payment in 2017 through 2019. In the alternative, plaintiff suggests using a reasonable intermediate date of September 11, 2018, a midpoint between the first and last relevant payments. There is no doubt that the court could set the prejudgment interest to be calculated at the time each improper payment was made pursuant to the fraud scheme (see Mar Oil, S.A. v. Morrissey, 982 F.2d 830 [2nd Cir. 1993]). However, the Court agrees that here the prejudgment interest should be calculated using the intermediate date of September 11, 2018, and should be calculated through the date of the restitution, or May 7, 2024.

III. Breach of Contract

Plaintiff also seeks damages for breach of contract in the amount of $3,680,316.91. According to plaintiff, that is the sum he paid between 2011 and 2017 before the fraud commenced. In other words, plaintiff wants to be made whole for all payments he made in connection with the contract. He notes that he lost that money as well as any possibility of receiving $8.5 million upon Aunt Tekla's death.

Plaintiff argues that he is entitled to "expectation" damages, also known as "benefit-of-the-bargain" damages, that would put the plaintiff in as good an economic position as if the defendant had fully performed under the contract. Plaintiff maintains that he expected to receive 8.5 million dollars, although he admits that could have either made a profit or broke even.

Notably, because the contract revolved around insurance on someone's life, plaintiff would have had to keep paying the premiums until Aunt Tekla passed away, which ended up being in 2025. Thus, it seems plaintiff would not have made any profit and would have paid many millions of dollars on additional premiums. Regardless, these hypothetical damages or profit are speculative and uncertain.

Because this case is unlike other breach of contract cases, plaintiff's reliance on cases discussing unjust enrichment is unavailing. The money paid from 2011 to 2017 did not unjustly enrich defendant but instead went to the insurance company pursuant to the agreement. This is in contrast to the sums kept by defendant in connection with the fraudulent scheme.

Damages cannot be speculative, remote, or unrelated. "It has long been recognized that the theory underlying damages for breach of contract is to make good or replace the loss caused by the breach . . . Damages are intended to return the parties to the point at which the breach arose and to place the nonbreaching party in as good a position as it would have been had the contract been performed" (see, iGo Mktg. & Entertainment, LLC v Hartbeat Prods., LLC, 217 AD3d 753, 754-55 [2d Dept 2023]). Where a contract is "silent with respect to damages," courts use common sense to assess "what the parties would have concluded had they considered the subject" (Kenford Co. v County of Erie, 67 NY2d 257, 262, 502 NYS2d 131 [1986]).

Here, the parties' short written contract did not speak to damages. Nor is there any indication that the parties reasonably contemplated consequential damages. As noted, from 2011 to 2017 plaintiff had the benefit of his bargain, and had Aunt Tekla died, would have received his portion of the insurance proceeds. However, as noted, the entire agreement rested on the life of another and there is no way to calculate definitive damages as of 2017. Critically, consequential damages cannot be speculative or conjectural (Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of NY, 10 NY3d 187, 193 [2008]; see also Vermillion v Roofing Guys, Inc., 239 AD3d 1336, 1337 [4th Dept 2025]["Here, plaintiff entered into a "bare bones" contract with defendant to tear off the roof of the residence, replace all rotted plywood, re-lay architectural shingles, and remove all roofing debris. Inasmuch as the contract makes no mention of consequential damages and contains nothing that could be interpreted as contemplating consequential damages, and no party testified that consequential damages were contemplated when the contract was entered, the court properly precluded testimony or proof of consequential damages"]).

The only direct and natural consequence of defendant's failure to remit payments was plaintiff's loss of the $2,283,552.40 he paid during the period of breach.

In any event, even if it could be argued that consequential damages were contemplated, given the specific agreement here, damages would be speculative and hypothetical. Indeed, as noted, in 2017 it was unknown how long Aunt Tekla would live, and what the premiums through 2025 would have been. Nor is there sufficient record evidence to show the fair market value of the life insurance policy.

Ultimately, plaintiff has not sufficiently demonstrated specific, non-speculative breach of contract damages that were contemplated by the parties. Accordingly, the Court makes no award for breach of contract.

IV. Punitive Damages

Finally, plaintiff seeks an award of punitive damages based on defendant's egregious conduct.

In Ross v. Louise Wise Servs., Inc. (8 NY3d 478, 489 [2007]), the Court of Appeals explained:

Punitive damages are permitted when the defendant's wrongdoing is not simply intentional but "evince[s] a high degree of moral turpitude and demonstrate[s] such wanton dishonesty as to imply a criminal indifference to civil obligations" (Walker, 10 NY2d at 405; see Rocanova v Equitable Life Assur. Socy. of U.S., 83 NY2d 603, 613 [1994]). In Prozeralik v Capital Cities Communications (82 NY2d 466, 479 [1993]), the Court wrote that punitive damages may be sought when the wrongdoing was deliberate " 'and has the character of outrage frequently associated with crime' " (citation omitted). The misconduct must be exceptional, "as when the wrongdoer has acted maliciously, wantonly, or with a recklessness that betokens an improper motive or vindictiveness . . . or has engaged in outrageous or oppressive intentional misconduct or with reckless or wanton disregard of safety or rights" (Sharapata, 56 NY2d at 335 [citations and internal quotation marks omitted]; see also Wilson v City of New York, 7 AD3d 266, 267 [1st Dept 2004] [misconduct lacked "the character of spite, malice or evil motive"]).

Further, punitive damages do not require harm aimed at the general public (see Giblin v. Murphy, 73 NY2d 769, 772 [1988]["Nor can we accept defendants' argument that the punitive damages award must be overturned because there was no harm aimed at the public generally. Punitive damages are allowable in tort cases such as this so long as the very high threshold of moral culpability is satisfied"]). They are intended not" only to punish the defendant but to deter him, as well as others who might otherwise be so prompted, from indulging in similar conduct in the future." (Walker v. Sheldon, 10 NY2d 401, 404 [1961]).²

Here, there can be no question that defendant's multi-year fraud scheme during which he stole over 2 million dollars leading a federal criminal conviction evinced a high degree of moral turpitude, has the character of outrage associated with crime, and showed a criminal indifference to civil obligations. Thus, in the Court's view an award of punitive damages is warranted.

Plaintiff suggests that the Court may award up to at least 9 times the amount of the fraud damages, citing Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008) and BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996).

The Court must consider three "guideposts" in determining the validity of a punitive damages award: "(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases." (State Farm Mutual Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418 [2003]).

As already stated, the Court finds the conduct without a doubt reprehensible, indeed criminal, and outrageous. It is hard to compare this case to others as each case is unique. However, the Court does consider that although it cannot award breach of contract damages, plaintiff was harmed considerably by the loss of the use of his money for many years, the potential loss of additional profit had the agreement been honored, and the outright theft of over 2 million dollars under the fraud scheme.

The Court also notes that the conduct at issue was not isolated. Rather, it was a series of acts which took place over a two-year period.

An award of 9 times the fraud damages or more than $18 million might be constitutional but is quite extreme. While defendant's conduct was egregious, immoral and criminal, and defendant should be made whole, the punitive damages award should not be so distant from the specific harm caused by the fraud. In other words, while defendant deserves punishment and others should be deterred from engaging in similar conduct, the Court does not believe excessive punitive damages would serve the interests of justice. Instead, such damages should be reasonable and proportionate to the harm suffered by plaintiff. Given the foregoing, a 1:.5 ratio between the fraud damages and punitive damages seems appropriate. In other words, the Court awards punitive damages in the amount of 1.1 million dollars.

The Court has also given consideration to the defendant's financial circumstances and ability to pay. In his disclosures to the sentencing court, defendant showed ownership of numerous buildings and other interests. His total assets were noted to be over $27 million, and his liabilities were $6.3 million. In his in camera financial disclosure to this Court defendant still shows many millions of dollars in assets.

CONCLUSION

Based on the foregoing, it is

ORDERED, that on the fraud cause of action judgment is granted in favor of the plaintiff and against defendant in the amount of $2,283,552.40 with interest thereon from September 11, 2018, through May 7, 2024 ; and it is further

ORDERED, that the base fraud damages amount of $2,283,552.40 is deemed satisfied by the payment of restitution in the federal criminal action, leaving only the interest thereon due and owing; and it is further

ORDERED, that on the breach of contract cause of action no damages are awarded; and it is further

ORDERED, that punitive damages in the amount of $1.1 million are awarded; and it is further

ORDERED, that any other relief sought and not granted herein is denied.

This constitutes the decision and order of the Court.

DATED: 10/9/2026

HON. ARIEL D. CHESLER

FOOTNOTES

1.   To the extent plaintiff claimed at trial that he made additional payments of $500,000 to defendant in 2020, his evidence was insufficient to establish the same. Specifically, he did not provide copies of cancelled checks or wire payments and utilized unreliable receipts received from defendant. Further, such additional sum was not reported to the US Attorney's office or at any other time. In sum, this aspect of the claim will not be credited by the Court. The Court also agrees with defendant that plaintiff did not plead fraud in the inducement and thus cannot pursue that theory now.

2.   Defendant's reliance on cases finding it improper to award punitive damages for ordinary breach of contract which does not impact the public are unavailing. The punitive damages here are based on the fraud claim and punitive damages may be awarded (see Giblin, supra; see also Don Buchwald & Associates, Inc. v. Rich, 281 AD2d 329 [1st Dept 2001]; Swersky v. Dreyer and Traub, 219 AD2d 321 [1st Dept 1996]). This was also not an ordinary breach of contract but a two year fraud scheme during which defendant stole over $2 million dollars.

Ariel D. Chesler, J.