Universal Express Inc fka USXP

[StockdungU]

Jay Fung: Jay Fung, who personally gave funds to Universal Express, is an officer at Pudong and Wan Tsing and a former officer at Max Capital, according to state records. The company phone directory at Max Capital listed Fung and Balena, but neither of them returned messages. Calls were left for the other parties, but they could not be reached or did not return calls.

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SEC: Fla. companies profited from Universal Express stock scheme

Date: Monday, April 7, 2008, 12:00am EDT - Last Modified: Thursday, April 3, 2008, 9:20am EDT

http://www.bizjournals.com/southflorida/stories/2008/04/07/story8.html

SEC court filings against the former CEO of Boca Raton-based Universal Express say the company made millions of dollars in 2007 by selling unregistered securities - with help from some South Florida companies.

Even after losing a $25.7 million judgment to the SEC for issuing unregistered securities in prior years, Universal Express and its executives employed a similar practice last year until a court-appointed receiver shut the company down, the court filings said.

In its case in New York federal court, the SEC is pursuing a motion to jail former Universal Express CEO Richard Altomare for contempt because he has not paid his portion of that judgment. Altomare contends he can't afford to pay the first $1.7 million of his $3 million judgment.

That judgment came in March 2007. The judge ruled the company, Altomare and its general counsel issued more than 500 million shares of unregistered public securities between April 2001 and January 2004. The parties receiving those shares at no charge sold them for $17.9 million and kicked back nearly $10 million of that to Universal Express, which distributed $1.4 million to Altomare.

Facing an SEC lawsuit and being barred from that practice by a federal judge apparently did not stop Universal Express. From January through July 26 of last year, the company issued 20.9 billion unregistered shares to various parties, according to a declaration by an SEC accountant. These parties sold most of the shares for a total of $17.3 million. During the same period, these parties paid nearly $9.3 million to Universal Express, according to the SEC.

The document shows that Edward M. Balena, of Boca Raton, received 2 billion unregistered shares of Universal Express and transferred most of them to some South Florida companies: Alton Gray Investments in Boca Raton; Newro in Wellington; Pudong LLC in Delray Beach; and Max Capital Holdings and Wan Tsing Enterprises, which share an office in Deerfield Beach. These companies sold the shares for $1.2 million and paid $990,000 to Universal Express, the SEC said.

Jay Fung, who personally gave funds to Universal Express, is an officer at Pudong and Wan Tsing and a former officer at Max Capital, according to state records. The company phone directory at Max Capital listed Fung and Balena, but neither of them returned messages. Calls were left for the other parties, but they could not be reached or did not return calls.

The SEC also named York Holdings Corp., of Boca Raton, and CLX & Associates, a Miami-based public relations firm, as recipients of unregistered Universal Express stock, although CLX did not sell any. Neither of them returned calls for comment.

The parties that participated in the 2001-2004 sale of unregistered Universal Express shares were co-defendants in the SEC's civil suit. They settled the charges and agreed to cooperate with federal authorities pursuing a criminal investigation against Altomare, according to court filings.

The SEC has not filed any action against the parties it accused of participating in Universal Express' most recent stock scheme. It is concentrating on recovering its judgment from Altomare.

In its March 21 motion for contempt, the SEC said $3.8 million passed through Altomare's bank accounts since July 2006, yet he has paid only $60,000 toward the judgment. Altomare received $2.7 million from Universal Express during that time, the SEC said.

Since he lost the judgment, Altomare and his wife have paid at least $366,890 to remodel their Highland Beach condominium, which is valued at up to $2.8 million. That includes $98,970 for audio and video equipment, $367,674 for lighting fixtures, $24,364 for area rugs and a $9,269 chandelier.

"Despite his claim of insolvency, Altomare continues to live a lavish lifestyle inconsistent with his professed state of poverty," the SEC said. "To the contrary, his actions indicate he has other sources of income which he has not disclosed to the court."

In Altomare's filing, which calls for a dismissal of the motion for contempt, he said his salary and bonuses from Universal Express were spent on personal expenses, and he does not have enough money left to pay the judgment. The filings say he has remodeled the condo to facilitate a sale so he could pay the judgment.

Altomare's Miami attorney, Arthur Tifford, did not return a call seeking comment.