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.)
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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)
