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headcounselor: That was perhaps the funniest post I've seen in years.
Thanks.
Unfortunately, it will be 3 months and 20 days before we find out what his sentencing will be.
Plant plead guilty on all four counts. Here's the docket entry. There is a document filed for his plea, but when I tried to access it using PACER, it told me I didn't have access.
06/30/2008 68 Minute Entry for proceedings held before HONORABLE NORMA L. SHAPIRO. Change of Plea Hearing as to JAMES PLANT held on 6/30/08. Plea entered as to JAMES PLANT (1) Guilty Count 1s,2s,3s,4s. Sentencing set for 10/21/2008, 10:00 AM before HONORABLE NORMA L. SHAPIRO.Court Reporter ESR.(jh, ) (Entered: 07/01/2008)
Stolen from another board: RA's appeal denied(see 2nd to last entry):
General Docket
US Court of Appeals for the Second Circuit
Second Circuit Court of
Appeals
Court of Appeals Docket #: 08-2283-cv
Nsuit : 1850 STATUTES-Secur Comm Exchange
U.S. Securities and Exchange Commission v. Filed 5/7/08
Universal Express, Inc.
Appeal SDNY (NEW YORK CITY)
from:
Case type information:
Civil
United States
None
Lower court information:
District: 04-cv-2322
Trial Judge: Gerard E. Lynch
MagJudge:
Date Filed: 03/24/04
Date order/judgement: 5/2/2008
Date NOA filed: 5/6/2008
Fee status: Paid
Panel Assignment:
Panel:
Date of decision:
Prior cases: NONE
Current cases NONE
Official Caption 1/
LEAD
OPEN
--------------------------------------
Docket No. [s] : 08-2283 -cv (L), 08-2284-cv (Con)
U.S. Securities and Exchange Commission,
Plaintiff-Appellee,
v.
Universal Express, Inc., Chris G. Gunderson, Mark S.
Neuhaus, George J. Sandhu, Spiga, Ltd., Tarun
Mendiratta,
Defendants,
Richard A. Altomare,
Defendant-Appellant.
--------------------------------------
Authorized Abbreviated Caption 2/
--------------------------------------
Docket No. [s] : 08-2283 -cv (L), 08-2284-cv (Con)
U.S. Securities and Exchange Commission v. Universal
Express, Inc.
--------------------------------------
1/ Fed. R. App. P. Rule 12 [a] and 32 [a].
2/ For use on correspondence and motions only.
Chris G. Gunderson
Defendant
George J. Sandhu
Defendant
Mark S. Neuhaus
Defendant
Spiga, Ltd.
Defendant
Tarun Mendiratta
Defendant
Universal Express, Inc.
Defendant
Docket as of June 26, 2008 9:40 pm Page 3
LEAD
OPEN
Richard A. Altomare Arthur W. Tifford Esq.
Defendant-Appellant [ LD ret ]
Tifford and Tifford, P.A.
1385 NW 15 Street
Miami , FL , 33125
305-545-7822
U.S. Securities and Exchange Catherine Anne Broderick Esq.
Commission
Plaintiff-Appellee [ n ]
Securities & Exchange
Commission, Office of General
100 F. Street, N.E.
Washington , DC , 20549
202-551-5119
U.S. Securities and Exchange Luis de la Torre Esq.
Commission
Plaintiff-Appellee [ LD ret ]
Securities and Exchange
Commission
100 F Street, N.E.
Washington , DC , 20549
202-551-5038
U.S. Securities and Exchange Michael A. Conley Esq.
Commission
Plaintiff-Appellee [ n ]
Securities and Exchange
Commission
100 F Street, N.E.
Washington , DC , 20549
202-551-5127
5/7/08 APPELLANT Richard Altomare, Copy of
notice of appeal and district court docket
entries on behalf of APPELLANT Richard
Altomare, filed. [Entry date May 13 2008
] [JK]
5/7/08 Index in lieu of Record on Appeals
Electronically Filed (Original documents
remain in the originating court).
[Entry date May 13 2008 ] [JK]
5/7/08 Copy of district court order RECEIVED.
[Entry date May 13 2008 ] [JK]
5/7/08 New Case Added: 08-2284-cv on behalf of
APPELLANT Richard Altomare, [Entry date
May 15 2008 ] [YL]
5/13/08 APPELLANT Richard Altomare, Form C filed,
with proof of service. [Entry date May 20
2008 ] [JK]
5/13/08 APPELLANT Richard Altomare, Form D filed,
with proof of service. (Scanned along with
C FORM.) [Entry date May 20 2008 ] [JK]
5/15/08 The CAPTION PAGE for this appeal has been
AMENDED to reflect consolidation. [Entry
date May 15 2008 ] [YL]
5/22/08 Scheduling order #1 filed. Appellants brief
due 6/30/2008. Appellees brief due
7/30/2008. Ready week 9/8/2008. [Entry
date May 27 2008 ] [JK]
5/22/08 Notice to counsel re: scheduling order #1.
[Entry date May 27 2008 ] [JK]
5/22/08 Telephonic Pre-Argument Conference Notice
and Order from Vidya Kurella, Scheduled For:
6-9-08, at 11:30am, Filed. [Entry date
May 27 2008 ] [JK]
5/29/08 The new case manager assigned to this case
is: Rodriguez, Joseph. [Entry date May 29
2008 ] [JR]
5/29/08 Appellant Richard Altomare emergency motion
for stay of Order of incarceration for civil
contempt filed with proof of service.
[Entry date May 29 2008 ] [JR]
5/30/08 Notice of appeal acknowledgment letter from
Arthur Tifford received. [Entry date Jun
2 2008 ] [PI]
5/30/08 Notice of appeal acknowledgment letter from
Arthur Tifford received. [Entry date Jun
3 2008 ] [JR]
6/4/08 Notice to counsel Issued regarding: Motion
for Stay of Order of Incarceration for Civil
Contempt has been placed on this Court`s
Substantive Motions Calendar for TUESDAY,
JUNE 24, 2008, **ON SUBMISSION**. Opposing
papers are due by JUNE 12, 2008. [Entry
date Jun 4 2008 ] [AG]
6/5/08 Letter dated 6/4/08 from Luis de la Torre,
Esq., stating that he is lead counsel for
the SEC, and that Michael A. Conley and
Catherine A. Broderick are also counsel of
record for the SEC. [Entry date Jun 6
2008 ] [JR]
6/5/08 Notice of appeal acknowledgment letter from
Luis de la Torre received. [Entry date Jun
6 2008 ] [JR]
6/5/08 Notice of appeal acknowledgment letter from
Michael Conley received. [Entry date Jun
6 2008 ] [JR]
6/5/08 Notice of appeal acknowledgment letter from
Catherine Broderick received. [Entry date
Jun 6 2008 ] [JR]
6/11/08 It is respectfully recommended to the
presiding Judge of the panel hearing the
appeals 08-2283-cv (Lead), 08-2284-cv (Con)
& 07-2407-cv be HEARD IN TANDEM. (VK)
[Entry date Jun 11 2008 ] [JR]
6/11/08 Notice to counsel regarding Court's Tandem
Order dated 6/11/08. [Entry date Jun 11
2008 ] [JR]
6/12/08 Appellee U.S. Securities and Exchange
Commission opposition to Appellant's motion
for stay of order of incaceration for civil
contempt filed with proof of service.
[Entry date Jun 13 2008 ] [JR]
6/13/08 Anti-Virus Certificate on behalf of APPELLEE
U.S. Securities and Exchange Commission,
opposition to motion for stay of order of
incarceration for civil contempt, Received.
[Entry date Jun 13 2008 ] [JR]
6/25/08 Appellant, through counsel, moves for a stay
of an order of incarceration for civil
contempt pending either a remand for further
evidentiary hearings or appeal. Upon due
consideration, it is hereby ORDERED that the
motion is DENIED. The Appellant has not made
an adequate showing of a substantial
likelihood of success on the merits. See
Mohammed v. Reno, 309 F. 3d 95, 100-01 (2d
Cir. 2002). Appellant`s consolidated appeals
docketed under 08-2283-cv (L) and 08-2284-cv
(Con) shall be heard in tandem with his
appeal docketed under 07-4207-cv. The case
is referred to Staff Counsel to set an
expedited briefing schedule for 08-2283-cv
(L) and 08-2284-cv (Con). Before: RKW RJM &
JAC, CJJ. (FP) [Entry date Jun 25 2008 ]
[JR]
6/25/08 Notice to counsel regarding Court's Order
filed on 6/25/08. [Entry date Jun 25 2008
] [JR]
6/25/08 Order FILED DENYING motion for stay of Order
of Incaceration for civil contempt by
Appellant Richard Altomare, endorsed on
motion dated 6/25/2008. See Court`s Order
filed on 6/25/08. [Entry date Jun 25 2008
] [JR]
6/25/08 Appellant Richard Altomare motion to
establish deferred appendix briefing
schedule and extension of time of 30 days
for all parties filed with proof of service.
[Entry date Jun 25 2008 ] [JR]
Docket as of June 26, 2008 9:40 pm Page 8
Oops - duplicate
Oops - duplicate
Oops - duplicate
I have no idea, but I'm pretty sure that the courts have a way to deal with such events - otherwise, nobody would pay million dollar fines...
That I don't know. He will still owe the money (can't get out of it by declaring BK either), and the courts will come after it. It may be that he can also find a way to go over some legal line and cross into criminal contempt.
I'm no lawyer, and I didn't stay at any hotel last night...
I wonder if any of the local 'news' orgs will be printing/showing any info about Plant's plea?
Probably not...
knowles: Let me see if I've got this right - You think that Plant may in fact be innocent, but just pleading guilty because he's afraid that he'll be found guilty.
And he will be essentially rolling over on others, testifying about their roles in the scam?
If he is truely innocent, then what could he possibly testify to that he couldn't testify to before now? As an innocent man, what would he know about who did what when and how?
Were there other players? Possibly. But holding on to the idea that Plant may still be innocent just doesn't make sense to me.
Good luck with that...
Technically, he's been in custody ever since he was arrested, but released on his own recognizance.
Dickmo - I'm fairly sure that either the victim's rights org, or the court record, will tell us exactly what he pleads to, and what punishment that results in, within the week.
If the SEC goes forward with their suit (probably will, but small chance they might not want to spend more money trying to find blood in this stone), Plant will have no defense, and, by extension, neither will the company. Any penalty against the company will surely bankrupt it.
Good luck.
He will be in jail until he provides the judge with proof that he can't pay off the judgment against him, or until he pays it off, or until 18 months goes by, the maximum time he can server for civil contempt.
His main problem is that he kept claiming poverty, while still managing to pay for two very expensive pieces of real estate, 4 leases for luxury autos, but not the 10K he'd promised to pay, yet he failed to provide any evidence the judge requested that would substantiate that claim.
GamblerNC: Thanks for providing that info. Very interesting, and now makes sense that it came out - the initial reports made it look like the DOJ was going out of its way to provide the info to individuals, rather than providing info to the victim's rights organization.
I'm waiting to see how Plant's brigade paints this picture. So much for the idea that the FBI totally botched the investigation, that the DOJ was desperately trying to find a way out of the mess they had created, etc.
Clearly, if the report of his pleading guilty is true, as it appears it is, it is almost impossible for anyone to claim he is innocent.
Depending on your source, this pig has had either no trades, or one trade for 842 shares so far today.
Yikes...
BIGJOHN51: Someone wanted out at .004 today. Hopefully the seller(s) just got tired of waiting for more, and needed the 600.00 for something.
Oh well. The wait goes on...
At least for now, there are no sellers or buyers.
Doogrof: Bashers are screwed because USXP isn't on the SHO list (and hasn't been for years)?
Not quite sure I understand your reasoning...
You still get to the file, for what that's worth (or not worth).
There is about to be another symbol change. The grace period on filing the overdue 10K ends on the 16th. After that, THPHE.OB becomes THPHF.PK.
Yes it is. Go to the report, right-click on it and select Page Info - The last modified date is August 16, 2004.
And you think that means he actually will? Of course you do.
Have you not learned that nothing Talbot says has any meaning at all, and should be considered to be a pipe dream on his part, to give him some benefit of doubt?
How many things has he said he was doing over the last 4 years has he actually done? What piece of information has he provided, ever, that could be independently verified?
The best, and only, thing to do when it comes to Talbot speak is to not believe him. If he finally ever comes through, you'll be pleasantly surprised (I will be incredibly shocked), rather than wait, and wait, and wait, expectantly for something that never happens.
An FOIA request might be very difficult to pull off, since you probably would need more info than what is available to even fill one out.
As for filings, Talbot isn't talking about SEC filings. When he files, he only files in Canada, using SEDAR. He has never filed with the SEC, and never will file with the SEC (and so far, it looks like he will never file using SEDAR again).
Not only did the Judge deny the request for a stay, he totally slammed the request in the process:
Again, stolen from xrayviscion:
05/02/2008 321 ORDER denying 317 Motion for Extension of Time and Altomare remains obliged to surrender to the Marshal in this District on 5/2/08. Failure to appear will result in the issuance of a warrant for his arrest.. (Signed by Judge Gerard E. Lynch on 5/1/08) (cd) (Entered: 05/02/2008)
--------------------
OCR extract
04 Civ. 2322 (GEL)
ORDER
GERARD E. LYNCH, District Judge:
Defendant Richard Altomare moves "for an extension of time or stay of proceedings on any finding of contempt pending further evidentiary hearing on that issue." The motion will be denied.
The sorry history of this case is set forth at length in a series of prior opinions. See SEC v. Universal Express, Inc., 475 F. Supp. 2d 412, 415-21 (S.D.N.Y. 2007); SEC v. Universal Express, Inc., No. 04 Civ. 2322, 2007 WL 2469452, at *1-3 (S.D.N.Y. Aug. 31, 2007) ("Universal Express II"); SEC v. Universal Express, Inc., F. Supp. 2d 2008 WL 1790437, at *1 (S.D.N.Y. April 18, 2008) ("Universal Express III"). The present motion is occasioned by this Court's opinion and order of April 18, 2008, following an evidentiary hearing, finding Altomare in contempt of this Court's judgment of March 8, 2007, by reason of his failure to make reasonable efforts to comply with a disgorgement order. Universal Express III, 2008 WL 1790437, at *7. The Court's opinion of April 18 sets forth extensive fact findings regarding Altomare's complete failure to demonstrate inability to comply with the order. M. at *2-8.
Altomare appears to assume that the Court's order does not mean what it says. He begins by expressing "appreciat[ion]" for the Court's "apparently providing for an additional opportunity to produce documentation to show 'categorically and in detail' that any further payment is impossible." (D. Mem. 2.) That is not what the order provides. Rather, the Court expressly and unequivocally ordered that Altomare "surrender to the United States Marshal for the Southern District of New York on May 2, 2008, to be incarcerated until such time as he purges himself of the contempt, unless he has paid the disgorgement amount in full by that date." Universal Express III, 2008 WL 1790437, at *7. There is no mention of a further hearing. Rather, the passage quoted by Altomare provides, equally clearly, that Altomare is found to be in contempt, and that in order to compel his compliance with the Court's orders, he "will be incarcerated until he pays the disgorgement and prejudgment interest in full, or produces documentation to show categorically and in detail that any further payment is impossible." Id. at * 1. The Court does not contemplate further evidentiary hearings before making an adjudication of contempt, nor are further proceedings in this matter necessary. Rather, the Court has held extensive proceedings, and has provided Altomare with every opportunity to make the showing that he was directed to make at a prior hearing, and that he has so manifestly failed to make.
Like any civil contemnor, Altomare may purge himself of contempt, and win his release, by compliance with the Court's orders or by making a showing that he is unable to do so. But it is too late to stave off the adjudication or contempt, and the imposition of coercive sanctions.
Altomare appears to suggest that he received insufficient time to prepare for the evidentiary hearing, contending that the hearing was scheduled on January 18 and held on February 4. (D. Mem. 3.) This is a remarkable distortion of the record. In the first place,Altomare made no objection at the January 18 hearing to the date selected for the evidentiary hearing (see, e.g., 1/18/08 Tr. at 23-27),[1] nor did he seek an adjournment at the February 4 hearing, or suggest in any way that he was unprepared (see, e.g., 2/4/08 Tr. at 3-11).
[1] At that hearing, the Court noted "the history of this . . . proceeding has been that everything shows up the late afternoon the day before the hearing at which some hammer is supposed to come down." (1/18/08 Tr. at 22.)
In any event, such an argument would have been unavailing. Altomare has been in contempt of this Court's judgment since it was entered on April 2, 2007. In an extensive opinion filed on August 31, 2007, this Court determined that Altomare was in contempt not merely of the disgorgement order, but of the Court's injunction forbidding him from offering or selling unregistered securities in interstate commerce, participating in an offering of any equity security that has a price of less than five dollars, committing securities fraud, and acting as an officer or director of any issuer of registered securities. Universal Express II, 2007 WL 2469452, at *4-10. The only reason coercive sanctions were not imposed at that time with respect to his violation of these provisions was that the granting of the SEC's separate motion for the appointment of a receiver effectively put an end to Altomare's ability to engage in further violations of the injunction. The Court made clear at that time, more than five months in advance of the eventual February 4 hearing, that Altomare "[bore] the burden of producing evidence of [his] inability to comply with the Court's order requiring [him] to pay disgorgement and prejudgment interest." Id. at *9. The Court ordered Altomare to show cause on October 12, 2007, why he should not be held in contempt. Id. at *12. The Court then granted Altomare repeated extensions of time to comply or to prepare to make the requisite showing. As demonstrated in the Court's opinion of April 18, Altomare's failure either to comply or to demonstrate incapacity has been total.
Finally, Altomare submits a ten-paragraph affidavit that strikingly documents no additional efforts whatsoever at compliance. Nor does the brief affidavit even purport to constitute the required demonstration of inability to comply. At best, it expresses a promise at some future point to provide the documentation that Altomare has conspicuously failed, and indeed refused, to provide over more than a year since judgment was entered in this case. The time is well past for such futile gestures.
The submission of this motion, on the very eve of the ordered surrender, is completely inadequate to avoid the execution of the sanctions ordered by the Court. Altomare retains the ability to purge himself of contempt by complying with the Court's order. Moreover, as noted in the Court's April 18 opinion, the Court remains open to an application for release from contempt should Altomare provide full documentation of his economic circumstances demonstrating inability to comply. As of this time, however, he remains in contempt of the Court's order, and remains subject to the sanction of incarceration until such time as he purges that contempt.
Accordingly, the motion for an extension, stay, or further evidentiary hearing is denied. As directed in the Court's order of April 18, Altomare remains obliged to surrender to the Marshal in this District on May 2, 2008. Failure to appear will result in the issuance of a warrant for his arrest.
SO ORDERED.
Dated: New York, New York
May 1, 2008
GERARD E. LYNCH
United States District Judge
Altomare filed a motion yesterday to ask the Judge to stay the execution of the contempt judgement because this time he was really, really, really going to show the judge why he couldn't come up with the money, if the judge would just give him another hearing.
The Judge said "no chance."
From another board:
By: xrayviscion
02 May 2008, 02:47 PM EDT Msg. 549196 of 549196
(Msg. is a reply to 549195 by rs4racing.)
Yet another USXP Pacer NY Update 02 May 08
Date Filed # Docket Text
05/02/2008 321 ORDER denying 317 Motion for Extension of Time and Altomare remains obliged to surrender to the Marshal in this District on 5/2/08. Failure to appear will result in the issuance of a warrant for his arrest.. (Signed by Judge Gerard E. Lynch on 5/1/08) (cd) (Entered: 05/02/2008)
need: Actually, he's supposed to turn himself in today, or the US Marshalls come looking for his ass.
He actually tried filing a last minute request for a stay of having to respond to the court order yesterday. A bunch of mumbo jumbo about how he could show the judge, this time for real, why he really, really couldn't pay the judgement. Filed it yesterday.
This was the judge's response, as posted by xrayviscion on another board:
By: xrayviscion
Date Filed # Docket Text
05/02/2008 321 ORDER denying 317 Motion for Extension of Time and Altomare remains obliged to surrender to the Marshal in this District on 5/2/08. Failure to appear will result in the issuance of a warrant for his arrest.. (Signed by Judge Gerard E. Lynch on 5/1/08) (cd) (Entered: 05/02/2008)
He will be spending time in jail.
Odd trading lately - small dollar action, yet we're now trading in the .007 x .009 range, with the bid now up to .008.
Looks like few sellers, and one or two who want to add, but the money that's trading hands is almost laughable.
Oh well, better than being at .001 x .002...
janice shell: Not really - they just see it as the SEC and Judge Lynch doing everything they can to try to destroy their hero (and, of course, doing it illegally and that RA will win in the end).
Nothing will deter these people - for them to come to their senses requires that they look hard at themselves. That ain't gonna happen.
When the appeals court judges rule against RA and Gunderson, it will be because they're in the pocket of the NY Mafia.
And if by some miracle, RA does actually file an appeal with the Supreme Court, when that gets turned down, guess what they'll say.
And if RA does face criminal charges and he's found guilty, by a judge or jury, the story will be the same.
Sad.
The transcript - part 4:
In addition to basic house payments, the record reflects other substantial expenditures. For example, Altomare contracted to “build out” and furnish the Highland Beach condominium. (2/4/08 Tr. at 29.) Altomare has payed $673,425.35 to the Weinstein Design Group to remodel and furnish that property (D. Ex. 9 at 395), but has not demonstrated that all of the postjudgment expenditures were mandated by pre-judgment contractual obligations.[10] A similar pattern is reflected in Altomare’s expenditures on vehicles. Despite the fact that Altomare apparently has no dependent children of driving age and he and his wife “don’t drive that much” (2/4/08 Tr. at 42), he maintains three cars – a 2006 Bentley Continental GT, a 2007 Mercedes Benz ML350, and a 2007 Mercedes Benz S550V – pays in excess of $6,000 per month to maintain the leases on these cars (D. Exs. 13, 14, 15), and appears to pay in excess of $2,000 per month to insure them (see D. Ex. 1 at 54 (9/21 payment to GEICO); id. at 55 (9/28 payment to GLAIC)). Together, these costs approach $100,000 per year.
Altomare treats these extravagances as ordinary living expenses. However, profligate spending does not shield one from a judgment of contempt. Altomare has not documented any efforts, let alone adequate efforts, to negotiate an end to the automobile leases and to secure a less ostentatious form of personal mobility. Similarly, Altomare is not required to maintain two luxury properties as he does today, with their substantial mortgages and maintenance fees, and has not demonstrated adequate efforts to scale back on those expenditures, to renegotiate whatever contractual obligations he may have had related to the design of the Highland Beach property, or to ensure that his spending was limited to those and only those expenses that were contractually necessary. (See supra note 10.) Notwithstanding the judgment, Altomare continued the installation of almost $100,000 in designer lighting, flat screen televisions, and other audio-visual equipment, paying tens of thousands of dollars towards the purchase of these goods after the entry of the Court’s judgment. (D. Ex. 10; 2/4/08 Tr. at 70-72.) In any event, even assuming Altomare had been contractually obligated to purchase a $33,000 chandelier (P. Ex. 22; 2/4/08 Tr. at 116), and $50,000 in flat screen televisions and accessories (D. Ex. 10), he was under no obligation to keep them, and could have converted this personal property into cash to help satisfy the judgment. Altomare insists that he is unable to pay more on the judgment, but instead of scaling back on his living expenses (or at least documenting his efforts to do so), he chooses to maintain these properties and automobiles with undisclosed or questionable sources of income. Altomare’s claim that he is (and has been) unable to disgorge more, in light of this extravagance, is without merit.
Since this Court’s judgment, Altomare has continued to live an expense-account lifestyle. In the months following entry of the judgment, Altomare’s credit card statements reflect thousands of dollars of payments for what appear to be meals at fine restaurants, rooms in luxury hotels, and consumer electronics goods. (See D. Ex. 24 at 536-45).11 Altomare’s line of credit reflects a payment on June 18, 2007, of $10,000 to Steinway Piano Gallery in Boca Raton. (P. Ex. D at 73.) Even more disturbing, on or after March 8, 2007, the date of the judgment ordering Altomare to disgorge funds and barring him from remaining as an officer of Universal Express, Altomare directed Universal Express to transfer $58,100 from its accounts to his two adult sons, Brian and Scott Altomare, neither of whom apparently worked for the company at the time. (P. Ex. 23.) Altomare has claimed that payments by Universal Express to his sons were drawn from Altomare’s personal account, and were effectively payments from him. (2/4/08 Tr. at 103-104.) Universal Express wired substantial s 12 ums to Les Bijoux for the purchase of jewelry that Altomare ultimately sold to a secondhand dealer for his own benefit. (See P. Ex. 36 (spreadsheet of certain purchases made by Altomare at Les Bijoux); P. Ex. 37 (list of property transferred by Altomare to the secondhand dealer and seized by United States Marshals Service of the Southern District of Florida); P. Ex. 41 (reflecting payments of $80,000 from Universal Express to Les Bijoux between December 2006 and August 2007). In fact, since this case has been pending, Universal Express, on Altomare’s apparent direction and for his benefit, has wired Les Bijoux at least $588,900. (See Declaration of Leslie J. Hughes in Support of the SEC’s Motion for an Order Directing Marshal to Sell Property Being Held by the Receiver, dated Nov. 5, 2007, Ex. D (Universal Express’s checking account listing payments of $325,000 on April 13, 2006, $30,000 and $40,000 on April 26, 2006, $33,900 on June 5, 2006, $30,000 on June 27, 2006, $50,000 on August 21, 2006, $20,000 and $40,000 on January 26, 2007, and $20,000 on May 16, 2007).) By far the most valuable pieces sold by Altomare appear to have been purchased at least in part with funds wired directly from Universal Express to Les Bijoux. (See Intervenor’s Supp. Answer to SEC’s Turnover Motion, Ex. A; Deposition of Gregory Osipov, Les Bijoux, dated December 10, 2007, at 9-29.)
[11]In addition to expenditures that appear to be personal, Altomare’s credit card reflects payments that he insists were business expenses, for which he has sought reimbursement from the Receiver. (D. Ex. 24.) For example, a mere twelve days after entry of the judgment, Altomare’s credit card reflects a payment of $2,572.78 to the Wynn Las Vegas. (Id. at 536-37.) Months later, his card reflects a payment of $5,945.40 to the Ritz Carlton. (Id.) His card also reflects cash advances of $35,000 on July 24, 2007, and $10,000 on August 8, 2007. (Id. at 540.) On the somewhat heroic assumption that these expenditures were properly categorized as expenditures of Universal Express and not Altomare, they still may be relevant to the issue of Altomare’s contempt of court orders, because, at the time Altomare incurred these obligations (allegedly on behalf of Universal Express), he was in violation of a court order for remaining as an officer of the company. In any event, it is unclear that trips to Las Vegas constitute appropriate expenditures by an officer under the circumstances, after his company had been ordered to pay in excess of $21 million in disgorgement and civil penalties. (See Judgment of
March 8, 2007, at 4.)
---------------
04/18/2008 311 OPINION AND ORDER: The SEC's motion for an adjudication of contempt is granted. The Court finds that defendant Altomare is in contempt of this Court's Order of March 8, 2007. Defendant Altomare is ordered to surrender to the United States Marshal for the Southern District of New York on May 2. 2008, to be incarcerated until such time as he purges himself of the contempt, unless he has paid the disgorgement amount in full by that date. Failure to surrender will result in the issuance of a warrent for his arrest. (Signed by Judge Gerard E. Lynch on 4/18/08) (mr) (Entered: 04/18/2008)
The transcript - part 3:
Doc 311 - Part 3
OCR extract
----------
Altomare has received millions of dollars in income in recent years, has declared millions of dollars in assets, has a substantial cash flow, and has recently liquidated more than $500,000 in jewelry, but as of yet has only disgorged $60,000 to the Court. In October of last year, after having failed to pay a cent on the judgment for more than seven months (during which time
Altomare had substantial assets and cash flow), Altomare paid $30,000 towards the judgment and pledged to pay each month thereafter either 20% of his gross monthly earnings, or $10,000,
whichever is greater. (10/12/07 Tr. at 37.) Altomare has already missed two payments in his self-imposed schedule. Perhaps in order to excuse his nonpayment, he claims that there is little, if any, equity in both of his homes, and that his current payments on those properties are substantial. He also points to lease obligations for three luxury vehicles. Altomare’s effort to depict his luxurious living arrangements as liabilities, or as necessary living expenses, is a classic example of chutzpah.
Altomare and his wife own at least two properties. Their primary residence is in the Bocaire development in Boca Raton, Florida. On November 3, 2006, Altomare estimated the value of the house to be $1.4 million. (D. Ex. 3 at 172.) In March 2007, the month of the judgment, Altomare valued the house at $1.6 million, with $900,000 in equity. (P. Ex. H.) Testifying before this Court in February 2008, without providing a real estate appraisal for the property, Altomare valued the residence at approximately $1.1 million, with a double mortgage that exceeds the value of the house by approximately $80,000. (2/4/08 Tr. at 25.)[7] While Altomare claims that the house is encumbered by a second mortgage of approximately $178,000 in the form of a Wachovia line of credit (2/4/08 Tr. at 25, 45), he has not provided any documentation demonstrating that the credit line is actually secured by the property. Altomare has not documented any efforts to reduce his expenses or generate income from this residence, such as by renting the property and moving to less extravagant quarters.
The Altomares’ secondary residence is a condominium in Highland Beach, Florida. At the October 2007 hearing, Altomare and his wife committed to putting this second home on the market, with the proceeds gained from the sale going to pay down the judgment. (10/ 12/07 Tr. at 37.)[8] At that time, Altomare’s attorney represented that the property had $300,000 to $800,000 in equity. (Id. at 37.) On October 4, 2006, the property was appraised at $3.3 million. (D.Ex. 2 at 80.) In March 2007, Altomare valued the property at $4.7 million, with $2.7 million in equity. (P. Ex. H.) In his February 2008 testimony before this Court, without providing a recent appraisal, Altomare estimated the property to be currently valued at somewhere between $2.5 and $2.8 million, and testified that the property was double mortgaged in excess of $2.8 million. (2/4/08 Tr. at 27-28.)[9] Although Altomare represents that the property is on the market, it has yet to be sold. Even assuming the property is eventually sold, it is unclear whether such a sale would satisfy any portion of Altomare’s disgorgement obligations, assuming Altomare’s testimony that the property has negative equity is accurate. In the interim, Altomare has not documented any efforts to try to rent the condo or to otherwise make productive use of the property while it is on the market. Moreover, Altomare may be in a better position to satisfy the judgment of this Court by simply giving up the property, as he would be able to divert those funds that now go to its maintenance and mortgage to the Clerk of the Court. Nevertheless, Altomare continues to expend funds (of uncertain origin) to maintain this second luxury residence, rather than to use such funds to pay the disgorgement and prejudgment interest amounts.
[7] The Court can take judicial notice of the widespread decline in property values over the past year. See, e.g., Abby Goodnough, More Election Troubles in Florida, but That Doesn’t Bother the Governor, N.Y. Times, March 17, 2008, at A15 (“Florida is facing its worst financial crisis in decades, mostly because of the housing downturn.”). Whatever the present value of Altomare’s properties, the fact is that he failed to liquidate these assets when ordered to pay disgorgement more than a year ago.
[8] Again, while Altomare credibly testified that the sale of this property in the current market is difficult, he had taken no action to dispose of the property in the seven months preceding the October 2007 hearing.
[9] As of November 29, 2007, the current balance owed on the first mortgage was $2,099,222 (D. Ex. 5 at 250), and as of January 9, 2008, the current balance owed on the second mortgage was $747,801 (D. Ex 6 at 252).
[10] Altomare insists that he was contractually obligated to make these payments. (2/4/08 Tr. 29-30, 35-36, 68; D. Exs. 9, 10, 11.) However, the documentation provided by Altomare does not demonstrate that he was contractually obligated to make all the payments that he did. Pursuant to the contract between Altomare and the Weinstein Design Group, Altomare paid an upfront “design fee” of $20,000, and agreed to thereafter pay the cost of materials and labor of the renovation plus a certain premium payment based on the cost of the materials and labor. (See D. Ex. 9.) The Altomares would appear to be obligated to cover the costs of those materials and labor they chose to order, plus a markup based on a percentage of total costs. (Id.) However, the initial contract does not appear to obligate the Altomares to pay anything beyond the initial design fee, to obligate the Altomares to purchase any furniture or materials that were recommended by the designer, or to prevent the Altomares from scaling down the project and its costs where possible. (Id.) In fact, it appears that after the judgment of the Court was entered, the project expanded rather than contracted. After March 31, 2007, the total cost of the project increased by $99,266. (Compare D. Ex. 9 at 335 (listing a grand total of $591,225.99 on the March 21, 2007 invoice) with id. at 395 (listing a grand total of $690,492.14 on the November 26, 2007 invoice).) Altomare has not produced any documents or other evidence demonstrating that he was unable to control these costs, or would have been unable to revise the design plans to decrease the total cost of the project.
.....
04/18/2008 311 OPINION AND ORDER: The SEC's motion for an adjudication of contempt is granted. The Court finds that defendant Altomare is in contempt of this Court's Order of March 8, 2007. Defendant Altomare is ordered to surrender to the United States Marshal for the Southern District of New York on May 2. 2008, to be incarcerated until such time as he purges himself of the contempt, unless he has paid the disgorgement amount in full by that date. Failure to surrender will result in the issuance of a warrent for his arrest. (Signed by Judge Gerard E. Lynch on 4/18/08) (mr) (Entered: 04/18/2008)
The transcript - part 2
Doc 311 - Part 2
OCR extract
DISCUSSION
I. Legal Standards
A party may be held in civil contempt for failure to comply with an order of the Court “if the order being enforced is clear and unambiguous, the proof of noncompliance is clear and convincing, and the defendant[] ha[s] not been reasonably diligent and energetic in attempting to accomplish what was ordered.” See EEOC v. Local 638, 753 F.2d 1172, 1178 (2d Cir. 1985) (citation and internal quotation marks omitted). “It is not necessary to show that defendant[] disobeyed the district court’s orders willfully.” Id. (citations omitted).
Altomare, as an alleged contemnor who claims that he is unable to pay a judgment, “bears the burden of producing evidence of his inability to comply” with the disgorgement order. Huber v. Marine Midland Bank, 51 F.3d 5, 10 (2d Cir. 1995), citing United States v. Rylander, 460 U.S. 752, 757 (1983); McPhaul v. United States, 364 U.S. 372, 379 (1960); Maggio v. Zeitz, 333 U.S. 56, 75-76 (1948). Altomare’s “burden is to establish his inability clearly, plainly, and unmistakably.” Huber, 51 F.3d at 10. In other words, Altomare must clearly establish “that compliance is impossible.” Rylander, 460 U.S. at 757. If Altomare “offers no evidence as to his inability to comply . . . or stands mute,” he fails to meet that burden. Huber, 51 F.3d at 10, quoting Maggio, 333 U.S. at 75. Altomare “must demonstrate his inability to comply categorically and in detail.” SEC v. Bankers Alliance Corp., No. 95 Civ. 0428, 1995 WL 590665, at *2 (D.D.C. May 5, 1995) (citation and internal quotation marks omitted). Moreover, proof that Altomare cannot pay the entire amount would not absolve him from paying as much as is possible to pay under the circumstances:
When an order requires a party to pay a sum certain, a mere showing that the party was unable to pay the entire amount by the date specified is insufficient to avoid a finding of contempt. When a party is absolutely unable to comply due to poverty or insolvency, inability to comply is a complete defense. [Citation omitted.] Otherwise, the party must pay what he or she can. SEC v. Musella, 818 F. Supp. 600, 602 (S.D.N.Y. 1993) (citations omitted). The court will presume a present ability to comply with an order where at some point in the past a defendant could have complied with that order. SEC v. Princeton Econ. Int’l Ltd., 152 F. Supp. 2d. 456, 459 (S.D.N.Y. 2001).
II. Legal Standards Applied
In recent years, Altomare has had a substantial income. His 2006 W-2 from Universal Express recorded wages of $1.67 million (P. Ex. 13; 2/4/08 Tr. at 87-88), and his 2007 W-2 recorded wages of $1.745 million (D. Ex. 22). As would be expected under these circumstances, Altomare’s personal bank accounts reflect the receipt and disbursal of substantial sums, with millions of dollars passing through those accounts in recent years. (See P. Exs. 11, 14, 18, 19, K.) For example, between January 9, 2007, and January 8, 2008, Altomare deposited $1.57 million in his Wachovia bank account, with $1.18 million deposited on or after March 8, 2007. (P. Ex. 19; P. Ex. K, ¶¶ 2-5.)
In addition to having millions in income and a substantial cash flow, Altomare also has substantial assets, some of which appear to be relatively liquid. As of March 2007, the month of this Court’s judgment, Altomare claimed to own $6 million in artwork and jewelry, to have a life insurance policy with a cash value of $7 million, and to have $850,000 cash on hand and in banks, $900,000 in equity in his first home and $2.7 million in equity in his second home, and no credit card debt. (P. Ex. H.)2 In addition to artwork and jewelry, Altomare has other property of value, such as high-end audio visual equipment. (D. Ex. 10.) In September 2007, Altomare sold some jewelry and watches for $571,000, but little if any of the cash generated by the sale went to pay off the judgment. (See P. Exs. 38A-38B, 57.)[3]
Although certain aspects of Altomare’s financial situation are clear, such as his substantial income and assets, other aspects are far from clear. For example, in his testimony, Altomare insisted that his only source of income over the past 16 years has been Universal Express. (2/4/08 Tr. at 103.) However, many deposits in his bank account simply do not correspond in date or amount to recorded payments made by Universal Express to Altomare.[4] In addition to failing to account for the source of certain funds, Altomare has failed to account adequately for the disposition of other funds.
[2] The record does not reflect for what purpose Altomare prepared the March 2007 financial statement or to whom it was given. When asked to discuss this document, marked as Receiver’s Exhibit 11, during the course of his deposition, Altomare invoked his privilege against self incrimination and refused to even identify the document. (See P. Ex. 58 at 72.)
[3] Altomare did not notify either the SEC or the Court before the liquidation, and has not adequately documented where the proceeds from that cash sale have gone. Since Altomare has paid only $60,000 towards the judgment, and nothing at all until October 2007, it is clear that little, if any, of the jewelry proceeds were used to satisfy the judgment.
[4] By the SEC’s calculation, $747,175.46 in deposits to Altomare’s bank account in 2007 did not originate from Universal Express. (P. Ex. K, ¶ 9.) When confronted with examples of
suspicious deposits, Altomare was unable to identify the sources of those funds. (See 2/4/08 Tr. at 113-15.)
[5] Furthermore, although Altomare claimed that he only has one checking account (2/4/08 Tr. at 103), it appears that Altomare has made use of at least one other checking account, and a prime equity line of credit.6 Even in light of these troubling gaps and inconsistencies, Altomare has yet to provide a full sworn accounting of his financial situation, and, at his deposition, invoked his Fifth Amendment privilege against self incrimination in response to many questions about his financial situation.
[6] Altomare appears to have a Washington Mutual checking account number ending in 1791 that is in use. (D. Ex. 8 at 261, 280.) The existence of this checking account may explain the apparent disappearance of funds, such as the $160,466 in proceeds from the Washington Mutual second mortgage. (Id. at 270.) Altomare has produced no records for this account. Moreover, Altomare has a prime equity line of credit at Wachovia Bank. (See P. Ex. D at 54; P. Ex. K, ¶ 10.) Altomare never produced records for this account identifying disbursements from and payments to the credit line. However, the Receiver was able to obtain bank statements for the account, which show that the balance on October 13, 2006, five months before the judgment, was $10,481.38. (P. Ex. D at 54; P. Ex. K, ¶ 10.) Since January 1, 2007, Altomare has drawn at least $288,900 against that credit line. (P. Ex. E; P. Ex. K, ¶ 10.)
------------------------------
04/18/2008 311 OPINION AND ORDER: The SEC's motion for an adjudication of contempt is granted. The Court finds that defendant Altomare is in contempt of this Court's Order of March 8, 2007. Defendant Altomare is ordered to surrender to the United States Marshal for the Southern District of New York on May 2. 2008, to be incarcerated until such time as he purges himself of the contempt, unless he has paid the disgorgement amount in full by that date. Failure to surrender will result in the issuance of a warrent for his arrest. (Signed by Judge Gerard E. Lynch on 4/18/08) (mr) (Entered: 04/18/2008)
The transcript of the contempt order (again, compliments of xrayviscion):
Doc 311 - Part 1
OCR extract
U.S. SECURITIES & EXCHANGE :
COMMISSION, ::
Plaintiff, ::
-v.- :
UNIVERSAL EXPRESS, INC. et al., ::
Defendants. :
--------------------------------------------------------------x
Julie K. Lutz and Leslie J. Hughes, Securities and
Exchange Commission Central Regional Office,
Denver, Colorado, and Robert B. Blackburn,
Securities and Exchange Commission Northeast
Regional Office, New York, New York, for plaintiff.
Arthur W. Tifford, Tifford and Tifford, Miami, FL,
for defendant Richard A. Altomare.
GERARD E. LYNCH, District Judge:
OPINION AND ORDER
04 Civ. 2322 (GEL)
The Securities and Exchange Commission (“SEC”) moves for an order finding defendant Richard Altomare in contempt for failing to disgorge and pay prejudgment interest on ill-gotten gains from violating federal securities laws, as mandated more than a year ago by order of this Court. For the following reasons, that motion will be granted, and Altomare will be incarcerated until he pays the disgorgement and prejudgment interest in full, or produces documentation to show categorically and in detail that any further payment is impossible.
BACKGROUND
On February 21, 2007, this Court granted summary judgment in favor of the SEC in its action charging Altomare with violating various provisions of the federal securities law. See SEC v. Universal Exp., Inc., 475 F. Supp. 2d 412, 415 (S.D.N.Y. 2007). Thereafter, Altomare was permanently enjoined from selling unregistered securities and from engaging in securities fraud (see Judgment of March 8, 2007, at 1-3), effectively extending a temporary restraining order issued against him in 2004 (see Order of April 19, 2004). Altomare was also permanently enjoined from participating in an offering of penny stock (Judgment of March 8, 2007, at 9), and from acting as an officer or director of any company, including Universal Express, that issued certain types of securities (id. at 10), and was ordered to pay $1,419,025 in disgorgement of ill-gotten gains and $283,073 in prejudgment interest (id. at 6).
On June 29, 2007, the SEC moved for sanctions and a judgment of contempt against Altomare for his failure to disgorge any funds and to otherwise comply with the Court’s orders. By opinion dated August 31, 2007, this Court held that Altomare had willfully continued to issue unregistered stock, to issue penny stock, to engage in fraudulent activities, and to remain as an officer of Universal Express, all in clear violation of this Court’s orders. SEC v. Universal Express, Inc. (“Universal Express II”), No. 04 Civ. 2322, 2007 WL 2469452, at *1, 4-10 (S.D.N.Y. Aug. 31, 2007). Moreover, Altomare had not, as of August 2007, disgorged any of his ill-gotten gains. Id. at 9.[1] Altomare was ordered to appear before the Court on October 12, 2007, to show cause why he should not be held in contempt. (Id. at 12.) Since the Court also appointed a receiver for Universal Express (see Order of August 31, 2007), effectively preventing Altomare from continuing to violate most provisions of this Court’s orders through his position as an officer of Universal Express, the primary focus of the contempt proceedings became Altomare’s failure to disgorge and his ability to pay the judgment. Subsequent hearings were held on January 18 and February 4, 2008, with Altomare testifying at the February hearing.
On March 21, 2008, the SEC and Altomare submitted supplemental papers.
[1]Although the total judgment against Altomare includes civil penalties (see Judgment of March 8, 2007, at 6), the SEC has limited its contempt application to his failure to pay the disgorgement and prejudgment interest amounts (see P. Summary of Evidence at 28). Since Altomare had paid nothing as of the time of the SEC’s application, and to this date has paid only $60,000, the limitation is not material to whether Altomare is in contempt, and bears only on the remedy to be imposed.
RA heading to jail for contempt...
Posted by xrayviscion on RB. I haven't checked the docket myself yet, but xray has always been accurate about the docket info he posts:
04/18/2008 311 OPINION AND ORDER: The SEC's motion for an adjudication of contempt is granted. The Court finds that defendant Altomare is in contempt of this Court's Order of March 8, 2007. Defendant Altomare is ordered to surrender to the United States Marshal for the Southern District of New York on May 2. 2008, to be incarcerated until such time as he purges himself of the contempt, unless he has paid the disgorgement amount in full by that date. Failure to surrender will result in the issuance of a warrent for his arrest. (Signed by Judge Gerard E. Lynch on 4/18/08) (mr) (Entered: 04/18/2008)
BIGJOHN51: Hold on a little longer. Yesterday may have been the first step towards priming the .004 pump.
BIGJOHN51: I hope the person who sold (and the buyer) the 1784 shares at .004 so far today have Scottrade accounts.
A 7.136 trade...
Hello!!! What does it matter?
Right - some other company is doing the web site, which of course he has no control over (other than he's supposedly paying them to provide it). Apparently you believe that.
Right - so what's the story on the financials which are now over 2 weeks past his end of march target? Are they being done by the web guys, as well?
Oh, next time you talk to him, ask him how the FDA approval is going - and why it's taking 5+ years to do what every other rapid test kit company does in about 1?
Or ask him about the EU approval.
Or why, if the company is doing so well, he hasn't bought back the whole float at this price.
Or, ask him to provide you with one, independantly verifiable piece of information about anything - distributer names, lab locations, which branch of the military is performing the tests and where.
Anything at all.
You'll get bupkiss. Nada. Nothing.
Unless you count the dozens of lies he's told people year after year after year.
You are way beyond optimistic in any normal sense of the word...
But good luck to ya. You clearly need it...
Tomorrow the 2 weeks is up.
BTW - Canada does not have a central SEC. They do have an agency that coordinates activities between the SEC that each province or territory has.
And why would you think that any of those SECs would be scrutinizing a company that does not list or trade on any Canadian exchange? It isn't violating any SEC regs in canada because it doesn't trade in Canada, thus no SEC interest or jurisdiction.
Almost funny - one person buys approximately 187K shares, essentially at market, to get us to .0008, and someone comes along to sell approximately 135K shares, essentially at market, to get us back to .0004.
It would be funny, if I didn't own this pig...
Wow, someone really needed about 40.00...