Altomare earned $1M as Universal Express relied on illegal stock sales
South Florida Business Journal - by Brian Bandell
While Boca Raton-based Universal Express' operations were supported by illegally selling $9.5 million in unregistered securities, former CEO Richard Altomare collected about $1 million, according to a receiver's examination of the company.
Miami-based attorney Jane Moscowitz reported the findings on Sept. 28 to a New York federal court judge who had appointed her the company's receiver on Sept. 7 and ousted Altomare. The SEC won $25.7 million in damages against Universal Express, Altomare and general counsel Chris Gunderson over selling unregistered securities and issuing false and misleading press releases.
When Moscowitz took over the company, she found Universal had $83,000 in the bank and couldn't meet its $112,000 bi-weekly payroll to employees other than Altomare and his wife. She dismissed the employees.
The company was behind in rent and had accounts payable of $3.4 million. That includes $450,000 to New York's Madison Square Garden, $300,000 to Major League Soccer, $300,000 to the National Hockey League, $267,450 to the operating company of the BankAtlantic Center in Sunrise and $173,416 to The New York Times for advertising.
For the fiscal year ended June 30, the luggage shipping company (OTCBB: USXP) had revenue of $1.2 million and expenses of $4.4 million, Universal Express officials told the receiver. The liabilities were $7.1 million.
"Substantially all of the company's income since Jan. 1, 2007, has come from the sale of securities, and it cannot meet its obligations without a continued stream of funds from such sources," Moscowitz wrote.
She also found employees, excluding Altomare, charged $61,000 to their credit cards for company expenses, but weren't reimbursed.
Meanwhile, Altomare collected $1 million in salary, including a $200,000 bonus, from January through Sept. 1. Altomare's wife made $43,076 during that time, although Moscowitz said Altomare could not explain what her job was.
Arthur Tifford, the Miami-based attorney for Altomare and Gunderson, did not return a call for comment. They appealed the ruling by the federal judge, who ordered them to appear on Oct. 12 to show cause why they should not be held in contempt and possibly jailed.
Boca Raton-based attorney Andrew Schwartz, who represents a former Universal Express employee, said Moscowitz should pay former employees out of funds from corporate assets she's selling.
"I believe the ex-employees would have a potential cause of action against Altomare, and probably could win a judgment, but the question is whether they could collect a judgment," Schwartz said. "There are bigger people who want to get him."
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