By Steve Large

SACRAMENTO (CBS13) – Michael Lyon built a real estate empire, only to lose it in a scandal involving sex, lies and secret videotapes.

Tuesday, lawyers for Lyon and eight victims finalized a civil suit settlement where Lyon agreed to pay out $2.5 million.

The final signatures on the settlement were finally signed Tuesday afternoon, two years after CBS13 broke the story of Lyon’s secret tapes.

The settlement follows what started as a scandal in Sacramento’s most elite high society circle.

The leaked secret video of Lyon in bed with prostitutes turned out to be only part of his story. He pled guilty in criminal court for making those secret recordings.

But in the civil case finally settled now, Lyon was sued by his very own friends and employees, people with whom he never had any physical relationships but who were secretly recorded, he now admits, in his homes partially clothed or naked.

Bob Zimmerman is the attorney in the civil case, a case that in his 30-plus years in practice, he’d never seen before.

“Fortunately, there aren’t many cases like this,” he said. “I think what was different about it was the victims were people who were family, family friends, guests, employees that were people that took care of the children – and the enormity of the situation.”

Zimmerman says even with the video evidence, Lyon denied his involvement in early testimony.

“I told his lawyer, I said, ‘You know, his continued denial has made the plaintiffs that I represent more determined,'” Zimmerman said.

But on the day of jury selection, Lyon avoided the spotlight of another trial by agreeing to settle. Besides paying his victims the $2.5 million, Lyon agreed to apologize.

The victims in this case also demanded they be allowed to tell their story.

It’s a story of betrayal.

“He videotaped me in their guest bathroom,” one victim told CBS13.

The secret recording in some cases date back decades

“It’s feeling like he has to have something over on us,” one woman told us. “He actually has naked pictures of you and he can look at them whenever he wants.”

Wednesday at 10 p.m. on CBS13, the victims talk about how they found out, their stories of missed clues – and their fears that Lyon hasn’t stopped.


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