RA and Gundy have appealed!!
Friday, October 19, 2007
Altomare offers to settle fine as investigation starts againSouth
Florida Business Journal - by Brian Bandell
Former Universal Express CEO Richard Altomare told a federal judge he'd sell his Highland Beach condo to pay the judgment against him, but his civil penalties aren't his only problem. The U.S. Attorney's Office is again investigating his actions.
Faced with a $3.1 million judgment after the judge ousted him from the Boca Raton-based company, Altomare made the offer in New York federal court on Oct 12. He bought the 4,600-square-foot unit in November 2006 for $3.1 million and had $300,000 to $800,000 equity in it. Altomare and his wife also own a home near Boca Raton.
Altomare offered to pay $30,000 up front, $10,000 a month and a
percentage of his future salary toward the fine. That prompted Judge Gerard Lynch to postpone until January the decision of whether Altomare and former company general counsel Chris Gunderson were in criminal contempt. In April, the Securities and Exchange Commission won its case finding the company and those officials liable for illegally selling unregistered securities and issuing misleading press releases.
The SEC's motion for contempt claims Altomare and Gunderson continued this after Lynch's ruling. Universal Express raised $9.5 million selling unregistered securities this year while Altomare took a $1 million salary from the money-losing luggage shipping firm, according to Miami attorney Jane Moscowitz, the company's receiver, who will liquidate its assets and examine Altomare's finances.
Now federal authorities are investigating possible criminal conduct by Altomare and Gunderson. In his failed motion on Oct. 11 to delay the following day's contempt hearing, their Miami-based attorney, Arthur Tifford, said he spoke to officials with the U.S. Attorney's Office and the Federal Bureau of Investigation in September. They told him they had a criminal investigation into both clients and asked to depose Altomare.
The U.S. Attorney started investigating the case in 2004, when the SEC filed suit, but stayed its proceedings, Tifford wrote in his motion. He added that stock trader Tarun Mendiratta, a co-defendant in the SEC case awaiting trial, appeared to be cooperating with the SEC and the U.S. Attorney.
Tifford said the criminal investigation forced him to withdraw as Gunderson's attorney. "The only reasonable explanation for the U.S. Attorney's sudden reappearance is Messrs. Altomare and Gunderson's announced intention and expressed reference to presenting a strong and meaningful opposition to the SEC's motion for civil contempt. And to chill that intent through circumstances that amount to unfairness and trigger prejudice." Tifford didn't return a call for comment.
Altomare and Gunderson have appealed the damages.
AI
