Doc 341 Extract Part 3
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While pleading poverty to the Court, Altomare directed his attorney, defendant Chris Gunderson, to incorporate Encore Holdings, Inc., entered into a lease of a virtual office,
conducted negotiations to acquire a company operating in Florida, and offered an investment in the enterprise to at least one of the former investors in Universal Express. See attached deposition Exhibit 44. Altomare failed to disclose any of these activities in either the January 18, or February 4, 2008 hearings. While it is not illegal for Altomare to form a corporation, Response at 42-43, he is prohibited from offering securities when no registration statement is in effect or filed for the transaction, or serving as an officer or director of a public company.
Altomare has filed supplemental information that he has been served with a suit to foreclose on the Toscano condominium for failure to pay the mortgage. While this development indicates that he may lose this asset unless he cures his default, it does not meet his burden of proving impossibility to pay the judgment. As discussed above, he continues to have assets for which he has not disclosed the location or disposition. He continues to own, with his wife, the Bocaire home which was taken off the market and only re-listed for sale on July 12, 2008.
II. Altomare Has Not Met His Burden And Should Remain Incarcerated.
Altomare has failed to demonstrate categorically and in detail that it is financially impossible for him to pay further amounts toward the disgorgement judgment. The SEC has identified numerous assets that Altomare retains, which could be turned over to the SEC toward satisfaction of the judgment, including, but not limited to, his ownership in the Bocaire house, his fine art and jewelry, the furnishings in the Toscana condominium, his ownership interest if any in the Jackson memorabilia and Universal Express judgments. Nor has Altomare provided records to show the source of the down payment on the Toscano condo or the additional $43,000 in payments to the Weinstein Design Group from which it can be inferred that he has other bank accounts. Furthermore, he has not provided records showing the disposition of various cash advances from his more than fifteen credit card accounts. Regardless of whether Altomare is in default on the Toscano loan, he has not demonstrated his inability to pay some amount toward the judgment. Since the entry of the order to show cause in August, 2007, Altomare has spent over $400,000 through his Wachovia account 5480.
Altomare argues that the SEC’s search for his assets has been a shifting line in the sand moving back in time rather than focusing on his current ability to pay. Response at 21. The
SEC’s inquiries into Altomare’s finances prior to entry of the March 8, 2007 judgment are designed to locate assets and accounts which Altomare has not disclosed. He has known about
the SEC’s lawsuit since March 2004. He has had substantial time to structure his finances in a manner to hide his sources of income and assets.
Altomare argues that he should not remain incarcerated while the SEC analyzes his financial records. Response at 31-32. The SEC has attempted to work with Altomare’s counsel to jointly retain a financial analyst. When those efforts to work jointly failed because of Altomare’s purported inability to share in the cost, the SEC has retained an expert to review the records provided by Altomare, but he has not completed his analysis. Altomare has not provided any form of analysis, independent or otherwise, of the records that he has produced to the SEC or the Court. Response at 24. The summaries of various bank transactions submitted by the SEC do not meet Altomare’s burden of demonstrating the sources and disposition of his income and assets. They are limited to the information that has been available to the SEC, which does not have knowledge or possession of all of Altomare’s bank and credit card accounts. The 2006 bank account statements were necessary as they included information on wire transfers and other deposits that were not included in the checks and other records previously produced. Altomare has failed to provide any documentation on the property inspections for which he paid in July and September 2006. Response at 38-39. While Altomare’s credit report does not show ownership of additional properties in his name, he may have acquired properties in the name of an entity which he has not disclosed.
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07/18/2008 341 STATUS REPORT. Reply to Second Submission on Altomare Contempt Document filed by U.S. Securities and Exchange Commission. |
