Aug. 28, 2008 — Attorneys for Jeffrey Prosser hit back against allegations he's been dishonest in his financial disclosures and improperly bought millions of dollars of luxury goods for himself and his family with ICC funds during hearings on St. Thomas in Prosser's ongoing bankruptcy this week. (See: Trustee: Prosser Bought $9 Million in Luxury Goods with ICC Funds)
Prosser is in Chapter 7 bankruptcy, and Vitelco parent company ICC in Chapter 11.
In a previous hearing, Eling Joseph, Prosser's executive secretary of 19 years, and Ingrid Christian, a forensic accountant working for Chapter 11 trustee Stan Springel, both testified that Prosser had ICC spend tens of millions of dollars on sporting-event tickets, airline travel, hotel stays, jewelry, clothing, fine dining and cash payments for Prosser's wife, children, personal friends, personal servants and others, all without any discernible legitimate business reason. Joseph also said Prosser pocketed over $100,000 in ICC funds by having ICC cut checks to an employee named Anthony Paul, who cashed them for Prosser. Prosser's former personal valet, Arthur Stelzer, also testified to personally purchasing a Chopard watch for Prosser and knowing about a Breguet, a Parmigiani Fleurier, a Rolex and a Franck Muller, some of which Prosser did not disclose to the court. (See: Prosser Admits Lying to Bankruptcy Court About Jewelry Costs)
In addition to four Camille Pissarro paintings disclosed by the Prossers to the court, Chapter 7 trustee James Carroll has found two undeclared Pissarros on loan from the Prossers to New York City's Jewish Museum. Prosser attorneys Lawrence Schoenbach and Norman Abood worked hard to undermine many of these allegations.
Questioning Springel, Schoenbach displayed bank records showing $129,000 in checks to Paul, zeroing in on one for $8,000. He then showed credit card statements showing Prosser's personal American Express card was used to buy dinner in several of New York's finest restaurants before, during and after the check were cut and cashed, suggesting Prosser could not have been given the $8,000.
"You are assuming something I did not say, which is that all of that money went back to Mr. Prosser," Springel responded in part.
Questioning Carroll about the Pissarro paintings at the Jewish Museum, Abood showed the court the loan agreement with the museum.
"Can you indicate who the owner is?" Abood asked. He rephrased the question several times, apparently intending to have Carroll read Prosser's wife Dawn's name from the document, indicating the owner is not Prosser himself.
"This document doesn't indicate ownership," Carroll said. "It says "lender or authorized agent."
In a similar vein, Abood asked Carroll whether any of the watches alleged by Stelzer appeared in Prosser's insurance papers.
Duston McFaul, one of Springel's attorneys, objected the question was misleading.
"This insurance policy doesn't even reflect the watches Prosser did disclose, does it?" he asked. "Correct," Carroll answered. Ultimately, Abood elicited from Carroll that Stelzer's testimony is the main evidence for the existence of these watches, along with a photo of Prosser wearing a watch that might be a Rolex.
Making perhaps his most telling point, Abood challenged the allegation that Prosser had not disclosed his tax returns as required by showing a Dec. 3, 2007 letter to an attorney who had been working for Carroll, saying the tax forms were attached.
"If this in fact is an accurate document and was sent to Cymbler, do you agree sir Mr. Prosser is not responsible for Cymbler's actions?" Abood asked. "That is correct," Carroll responded.
Testimony touched also upon whether Prosser accurately declared his income and his corporate assets, whether transfers of hundreds of thousands of dollars from Prosser to his wife and what happened to over $2 million dollars worth of wine purchased by Prosser, among other disputes in the case, though with little conclusive result. The hearings this week are ostensibly to determine whether or which of three multi-million dollar homes and an array of expensive art and men's jewelry can be taken and sold, or will remain in Prosser's possession. The hearings will continue in Pittsburgh in September. (See: Court Gives Prosser 3 Setbacks as V.I. Hearings Open)
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