CMKM Diamonds Inc. (fka CMKX)

[dia duit]

http://norris.blogs.nytimes.com/2008/05/02/jail-day-for-altomare/

May 2, 2008, 3:15 pm
Jail Day for Altomare

Richard Altomare, the former chief executive of Universal Express must report to jail today, a federal judge ruled this afternoon. He said a warrant would be issued for Mr. Altomare’s arrest if he does not show up.

If you haven’t been paying attention to the Universal Express story, it involves a penny stock company that stayed in business for years by illegally issuing billions of shares of stock, telling shareholders that it would get rich from judgments against naked shortsellers. When the S.E.C. went after it, it claimed the S.E.C. was part of a conspiracy. When a federal judge ordered the company to stop issuing shares illegally, and barred Mr. Altomare from running the company, he ignored the order and issued billions of additional shares. When I wrote about the case, he took out a full-page ad in The Times to denounce me and the S.E.C. He never paid for that ad, or for a lot of other things, including some employee salaries, but he did use company funds to buy a lot of jewelry for his wife.

Judge Gerard Lynch ordered Mr. Altomare to pay $1.7 million in penalties and interest. So far, Mr. Altomare has paid $60,000. He has not kept a promise to pay $10,000 a month.

After a hearing, the judge ruled that Mr. Altomare had not demonstrated an inability to pay, nor had he explained the source of hundreds of thousands of dollars deposited in his bank accounts. Mr. Altomare now says he can prove that all the money came from Universal Express or from refinancing his home and condominium.

Although he was never indicted for a crime — and civil cases do not normally lead to incarceration — the result is that he will be in prison until he either pays or satisfies the judge that he cannot do so. In his request for a stay, Arthur Tifford, Mr. Altomare’s lawyer, said forcing him into prison would “constitute imprisonment for debt.”

In a filing on Thursday, Mr. Altomare provided an affidavit asserting that he really could not afford to pay the money, and asking that he be allowed to stay out of jail pending a new hearing at which he could demonstrate that fact.

If Mr. Altomare can provide that information, the judge said, he can purge himself of contempt and get out of jail.