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Lawyer Fails to File Justification for Prosser Pleading the Fifth

March 28, 2008 — A U.S. Bankruptcy Court has ordered Jeffrey Prosser's criminal attorney to provide a written legal justification for Prosser's refusal to answer questions, but four days after the deadline no brief appears to have been filed with the court.
Prosser, the former CEO and owner of Innovative Telephone, has been embroiled in Chapter 11 and Chapter 7 bankruptcy proceedings for many months.
As part of the Chapter 11 process, Prosser was required in January to testify about his assets and his financial activities under oath, personally answering questions from his creditors' attorneys in what is called a Section 341 deposition. When that hearing convened Jan. 25, Prosser refused to answer any questions, citing his Fifth Amendment right against self-incrimination.
(See "Prosser Pleads the Fifth Countless Times in Bankruptcy Hearing.")
The Fifth Amendment does not apply in civil or bankruptcy court, where no criminal charges are at stake, but can be asserted if the person has reason to believe they may be subject to criminal prosecution, and their statements in civil or bankruptcy court could be admitted as evidence. The law on the subject is complex.
A grand jury issued subpoenas in December and convened Jan. 19, and appears to be looking into issues between Vitelco and the V.I. Community Bank, another former Prosser property. (See "More Details Come to Light on Prosser Grand Jury.")
In January, Prosser hired criminal attorney Lawrence Schoenbach, who filed papers on Prosser's behalf with the U.S. Bankruptcy Court saying Prosser might be a subject — if not necessarily a target — of the criminal investigation, and so would no longer answer any questions from the court.
In February U.S. Bankruptcy Judge Judith Fitzgerald asked for a brief in support of the assertion of Fifth Amendment rights in regard to producing documents in a bankruptcy case. Schoenbach said he could provide them by March 10. But nothing was filed before the March 18 hearing.
"It appears that the debtor and his wife are now in contempt of this court," Fitzgerald said during the March 18 hearing.
"Your Honor, I can't — I don't have an explanation for why Mr. Schoenbach did not provide that brief, but I can assure you that as soon as we get out of this hearing, I'll find that out," replied Prosser's personal attorney, Robert Craig.
After the one statement, Fitzgerald did not find anyone in contempt, nor explicitly say that anyone would be held in contempt if documents were not produced. She set a new deadline of March 21 before moving it forward to March 24. She gave attorneys for Prosser's creditors until Friday to respond.
As of Friday evening, 1,479 briefs, motions, notices and other filings related to the case had been posted onto the Public Access to Court Electronic Records (PACER) system, an electronic public-access service that allows users to obtain case and docket information from federal appellate, district and bankruptcy courts. Five court documents filed Friday were available for public viewing on PACER by Friday afternoon. But there was no brief from Schoenbach.
The court reconvenes April 11 in Pittsburgh, at which time it will address this question, along with many others.
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March 28, 2008 -- A U.S. Bankruptcy Court has ordered Jeffrey Prosser's criminal attorney to provide a written legal justification for Prosser's refusal to answer questions, but four days after the deadline no brief appears to have been filed with the court.
Prosser, the former CEO and owner of Innovative Telephone, has been embroiled in Chapter 11 and Chapter 7 bankruptcy proceedings for many months.
As part of the Chapter 11 process, Prosser was required in January to testify about his assets and his financial activities under oath, personally answering questions from his creditors' attorneys in what is called a Section 341 deposition. When that hearing convened Jan. 25, Prosser refused to answer any questions, citing his Fifth Amendment right against self-incrimination.
(See "Prosser Pleads the Fifth Countless Times in Bankruptcy Hearing.")
The Fifth Amendment does not apply in civil or bankruptcy court, where no criminal charges are at stake, but can be asserted if the person has reason to believe they may be subject to criminal prosecution, and their statements in civil or bankruptcy court could be admitted as evidence. The law on the subject is complex.
A grand jury issued subpoenas in December and convened Jan. 19, and appears to be looking into issues between Vitelco and the V.I. Community Bank, another former Prosser property. (See "More Details Come to Light on Prosser Grand Jury.")
In January, Prosser hired criminal attorney Lawrence Schoenbach, who filed papers on Prosser's behalf with the U.S. Bankruptcy Court saying Prosser might be a subject -- if not necessarily a target -- of the criminal investigation, and so would no longer answer any questions from the court.
In February U.S. Bankruptcy Judge Judith Fitzgerald asked for a brief in support of the assertion of Fifth Amendment rights in regard to producing documents in a bankruptcy case. Schoenbach said he could provide them by March 10. But nothing was filed before the March 18 hearing.
"It appears that the debtor and his wife are now in contempt of this court," Fitzgerald said during the March 18 hearing.
"Your Honor, I can't -- I don't have an explanation for why Mr. Schoenbach did not provide that brief, but I can assure you that as soon as we get out of this hearing, I'll find that out," replied Prosser's personal attorney, Robert Craig.
After the one statement, Fitzgerald did not find anyone in contempt, nor explicitly say that anyone would be held in contempt if documents were not produced. She set a new deadline of March 21 before moving it forward to March 24. She gave attorneys for Prosser's creditors until Friday to respond.
As of Friday evening, 1,479 briefs, motions, notices and other filings related to the case had been posted onto the Public Access to Court Electronic Records (PACER) system, an electronic public-access service that allows users to obtain case and docket information from federal appellate, district and bankruptcy courts. Five court documents filed Friday were available for public viewing on PACER by Friday afternoon. But there was no brief from Schoenbach.
The court reconvenes April 11 in Pittsburgh, at which time it will address this question, along with many others.
Back Talk Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.