07/18/2008 341 STATUS REPORT. Reply to Second Submission on Altomare Contempt Document filed by U.S. Securities and Exchange Commission. (Attachments: # 1 Exhibit 22 Credit card cash advance, # 2 Exhibit 36 Checks for Jewelry, # 3 Exhibit 37 Credit Card cash advance, # 4 Exhibit 38 Cash advance, # 5 Exhibit 68 Weinstein invoice 2-7-08, # 6 Exhibit 44 Encore Holdings acquisition, # 7 Exhibit 69 Segoes Trust transaction)(Hughes, Leslie) (Entered: 07/18/2008)
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Doc 341
Extract Part 1
PLAINTIFF’S REPLY ON SECOND SUBMISSION ON ALTOMARE’S CONTEMPT
Plaintiff Securities and Exchange Commission submits this reply in support of its argument that Richard Altomare has failed to purge his contempt by either paying the full amount of disgorgement and prejudgment interest, or meeting his burden of proving it is impossible for him to make any payment to comply with the Court’s Order. Altomare has paid only $60,000 of the $1,419,025 in disgorgement and $283,073 in prejudgment interest that was ordered. Although Altomare has produced numerous documents in response to various requests by the SEC, he has failed to provide any coherent analysis that demonstrates it is financially impossible for him to make any further payment toward satisfaction of the Court’s order. To the contrary, his failure to produce documents that identify his assets and their disposition, the source of funds he received in the past two years, copies of all his credit card statements, and his activities in founding a new corporation to raise money from investors make it reasonable to infer that he has not disclosed all his assets or demonstrated his inability to pay an additional amount. On the basis of this record, the Court should deny Altomare’s request to be released from incarceration because he not met his burden of proof of inability to pay.
I. Altomare Has Failed To Demonstrate He Has No Assets From Which To Pay The Order.
There remain unanswered questions about the source of various funds Altomare used to acquire, refurbish and furnish the condominium. The settlement sheet for Altomare’s purchase
of the Toscano condominium lists a deposit of $100,000 in earnest money. [Exhibit 2 (previously marked as Exhibit 61 at 2/4/08 hearing), see Docket # 338-4] At the February 4, 2008 hearing, Altomare testified that he did not recall the source of these funds, “but it must have come out of … my checking account.” See February 4, 2008 hearing transcript at p. 47 [Docket 298]. Subsequent to his June 26, 2008 deposition, Altomare provided a copy of a letter dated September 1, 2006 from Coldwell Banker confirming receipt of a $100,000 personal check for deposit into the firm’s trust account related to the purchase of the Toscano condominium. See Defendant’s Exhibit 45, hand delivered to the court. However, Altomare has not produced a copy of the check or identified the account that was the source of these funds.
The bank statement for Altomare’s personal checking account at Wachovia Bank (ending in the account number 5480) lists no checks drawn on the account in the amount of $100,000. See Defendant’s Exhibit 46, Consolidated Statement 8/8/06 thru 9/6/06 at Bate numbered pages 2504-2508. Moreover, the balance in this account never exceeded $25,000 during three weeks
that precede the letter. Id. at p. 2508. Nor do the checks drawn on this account contain a copy of a check in the amount of $100,000 drawn on this account. Similarly, the Altomares’ credit line with Wachovia Bank (ending in the account number 4286) does not show any check in the amount of $100,000 drawn on the account in the month prior to September 1, 2006. See Exhibit D and E to March 21, 2008 SEC Submission on Contempt [Docket # 338-4, -11, -12]. Altomare has failed to produce evidence about the source of these funds. In these circumstances it is reasonable to infer that he has other sources of funds that he has not disclosed to the Court, from
which he could make some payment on the judgment.
The invoice from the Weinstein Design Group for the remodel and furnishing of the Toscano condominium lists total project costs of $611,306.35 as of February 7, 2008, of which
approximately $153,275 are for remodeling costs. See attached Exhibit 68. The balance of approximately $458,000 was used to acquire furnishings for the Toscano condominium. See Weinstein invoice 2/7/08 RAA-1239-1250. This invoice also indicates that of the $690,492.14 cost of the project, Altomares have made payments or received credits of $685,554.69. However, Altomares produced checks totaling only $641,979.52 that were paid to the Weinstein Design Group. Altomare has not produced documents showing the source of the additional $43,575.17 in payments.
Altomare has failed to provide a list of the assets he currently possesses or disclosed the disposition of his income and assets over the past two years. On August 9, 2007, the SEC
submitted a request for production of documents requesting that Altomare identify all expenditures of $500 or more, and the purpose of the payment, the amount, and the name of the
payee. He has failed to provide that information. On May 13, 2008, the SEC submitted its second request for production of documents requesting that Altomare identify all pieces of art
and jewelry that he owned in March 2007. He has produced an insurance policy1 which insured $807,800 in jewelry and $215,700 in fine art, but the documents do not identify the items insured. Altomare has failed to provide any inventory of jewelry, fine art, or other assets that he has possessed in the past two years. He was not able to identify jewelry purchased from Mayor’s for $4,313.25. See attached Exhibit 36; Attachment A, Altomare deposition at pp. 103-104 [Docket 338-1]. Moreover, when the SEC identified a watch purchased for $12,923.08 that Altomare testified on June 26, 2008 was located at his home, he then directed delivery of the watch to his attorney as payment on legal fees rather than to the SEC as a payment toward satisfaction of the judgment. At every step Altomare continues to demonstrate his contempt of the Court’s order.
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