Feb. 10, 2008 — Stan Springel, the court-appointed trustee for what had been Jeffrey Prosser's corporate properties, filed a civil action with the U.S. Bankruptcy Court Friday charging that Prosser had made, over the past decade, more than $60 million in "fraudulent and unauthorized" transfers from his corporate properties for the benefit of himself and his family, including his wife, Dawn Prosser.
Dawn Prosser was the defendant in one of the documents filed Friday in the bankruptcy case of Prosser, former owner and CEO of Innovative Communications Corp. Prosser is in Chapter 7 bankruptcy and ICC — parent company to Vitelco, Innovative Cable, TV Channel 2 and other local companies — is in Chapter 11.
The bankruptcy proceedings enter their third year Monday.
Springel said that "Jeff Prosser began to utilize the funds of … subsidiaries … including Virgin Islands Telephone Company, to pay for this lavish lifestyle."
In Friday's civil action, Springel sought the recovery of funds for the payment of the debts of Prosser and his companies through the bankruptcy court.
In contrast, criminal charges of fraud, if they were to be brought in such a case, would be filed in a different court, would be moved by a public prosecutor (not the Trustee), and fines and other penalties, not just the recovery of funds, might be sought.
According to the filing, Springel "has identified thousands of non-business transfers of property in the aggregate amount of at least $60,000,000 made by one or more of the ICC debtors [Prosser's companies] during the past decade to more than 160 parties and which were made at the direction of Jeff Prosser to and/or for the benefit of himself and his family, including the defendant [Dawn Prosser]."
In a footnote, the filing charged that more than $7,500,000 of those transfers were made even after the Prosser camp filed voluntary petitions for bankruptcy on July 31, 2006.
"In reality," the document stated, "the transfers were made with actual intent to hinder, delay, or defraud present or future creditors of the ICC estates…. Jeff Prosser began a systematic process of extracting and siphoning funds from the ICC debtors… [T]he process was designed to dissipate the assets of the ICC debtors and place those assets outside the reach of creditors…."
The lawyers for the Prosser camp had not yet responded at press time, but in earlier exchanges on similar matters they have argued that such payments were appropriate, on the grounds that Prosser, who owned the corporations involved, was "a highly compensated employee."
According to court documents, among the largest amounts of money in dispute were:
— $3,414,376, Banco Popular, purchase of fine wines and liquors from Park Avenue
Liquor Shop (New York);
— $3,115,651, American Express, various non-business credit card charges including clothing, jewelry, luxury goods, dining, air travel, and hotels;
— $3,112,825, Scott Lindsay, Interiors, interior decorating services and antiques, relating primarily to the Prosser house in Palm Beach;
— $1,332,640, K&E Construction, Inc., subcontractor for the construction of the "partially completed mansion currently under construction in Estate Shoys, St. Croix";
— $984,998, AIG Private Client Group, various insurance policies;
— $757,422, Bergdorf Goodman (New York City), luxury clothing and jewelry.
In addition, lesser sums, all more than $350,000 each, went to the following, all of whom were working on the Estate Shoys house: Roiter Mechanical Services, Addison Construction, B&L of Florence, Inc., Madison Cox Design, Inc., Artisan Design Group, and Jerry Mann, the contractor on the job.
The Prosser children were the targets of a filing making similar allegations. That document alleged that still another Mercedes auto, the sixth to surface so far, had been purchased for the family by ICC. (For what happened to the other five Mercedes see: "Fifth Prosser Mercedes Elicits Another Judicial Rebuke.")
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