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Prosser Pleads the Fifth Countless Times in Bankruptcy Hearing

Jan. 25, 2008 — Jeffrey Prosser, bankrupt owner of Vitelco parent Innovative Communications Corporation, spent the day Friday citing his Fifth Amendment right against self-incrimination over and over again as creditors fruitlessly asked him questions under oath.
Prosser is in involuntary Chapter 7 bankruptcy and ICC — parent company to Vitelco, Innovative Cable, TV Channel 2 and other local companies — is in Chapter 11. Friday's proceeding, called a 341 hearing for the section of U.S. bankruptcy law mandating it, was an information-gathering exercise, giving Prosser's and ICC's creditors an opportunity to question Prosser under oath about his and his company's finances.
At the beginning of the hearing, Prosser read a statement essentially saying he was declining to answer any questions on the grounds that, under the Fifth Amendment, he could not be compelled to testify against himself. After Prosser repeated the full statement several times in response to questions, Prosser's attorney Robert Craig and the several attorneys for Prosser's creditors came to an agreement that rather than repeat the entire statement in response to every question, Prosser would say, "Same." For the next several hours, in response to hundreds of questions ranging from the innocuous to the accusatory, Prosser said only "same" again and again.
Jeffrey Cymbler, attorney for Chapter 7 trustee James Carroll, asked some questions that suggested false statements on Prosser's financial filings.
"On the inventory of the assets of Dawn Prosser is a man's Chopard platinum and diamond ring, with a 3.6 carat emerald-cut diamond, insured for $73,500," Cymbler said. "Is that the rose Chopard watch or the Chopard watch with a blue band listed on Schedule B?"
"Same," Prosser said.
"Also, the item listed as gold watch with a rose band, insured for $92,148, is that a description of one of the Chopard watches listed on Schedule B?" Cymbler asked.
"Same," Prosser said.
"Can you explain to me how, when the valuation for insurance of those two watches exceeds $160,000, how can you estimate their value (on another document) at only $20,000?"
Other questions seemed more innocuous.
"How old are your children?" Cymbler asked.
"Same," Prosser said.
"When is your wedding anniversary?" Cymbler asked.
"Same," Prosser said.
Cymbler stopped questioning and made a statement disputing Prosser's right to plead the fifth for each and every question.
"For the record, I am aghast that I ask how old your children are and get the Fifth in response," Cymbler said. "I certainly believe I and the trustee will be bringing this transcript to (U.S.) Bankruptcy Judge Judith Fitzgerald. I don't see how every single question, including the age of your children and whether you ever resided in Orange Grove, can be privileged to Fifth Amendment protection."
Toby Gerber, an attorney for the Rural Telephone Finance Cooperative, one of Prosser's creditors, said after the hearing it is quite unusual for a person to decline to answer questions in a bankruptcy citing the Fifth Amendment right against self-incrimination.
"In order to do so, the person asserting the privilege has to believe he may be the subject of criminal prosecution for the actions that are the subject of the questions in the bankruptcy proceeding," he said. "There is no blanket exemption. It is hard to imagine how he can plead the Fifth when asked if he knows the names and ages of his children."
The bankruptcy court may compel him to answer some of the questions or face possible contempt-of-court charges, Gerber said.
The Source asked Prosser for any comment. He said he would not speak about anything related to the case until the proceedings were concluded.
"It seems that's likely to be awhile," he said in a genial, apologetic tone.
The decision to refuse to answer questions and cite the Fifth Amendment may be because of a brief filed with the U.S. Bankruptcy Court earlier this month by ICC Chapter 11 Trustee Stan Springel accusing Prosser of misconduct, including attempting to defraud his company's creditors. (See "Court Filing Accuses Prosser of Misconduct on Several Fronts.")
Among the specifics cited in the brief :
— "Valuing his clothing at only $2,500 … despite purchases on his behalf of $550,000 (a significant portion of which were for men's clothing) at Bergdorf Goodman, a luxury department store (in New York City) …";
— "Failing to identify three liens that had been filed against real property in Lake Placid, N.Y. …";
— "Failing to identify one or more life-insurance policies relating to Prosser …";
— "Failing to report all of his claimed income or sources of funds …"; and
— "Initially testifying that substantial advances to him and to ICC-LLC by New ICC were never intended to be repaid and then, at a subsequent hearing, testifying that such advances were intended to be repaid through a merger of certain companies that was not effectuated …."
The latter set of transactions involved tens of millions of dollars, according to previously filed court documents.
The brief also lists numerous instances in which Prosser failed — despite a court order on the subject — to provide court-appointed officials with information requested about his finances.
Another subject covered at some length is a series of "wrongful and fraudulent transfers" of property from New ICC to himself; his wife, Dawn Prosser; and others.
After all the creditors had their turn at bat, the 341 hearing was adjourned. It is scheduled to resume March 10 on St. Thomas, at which time more of the same is expected.
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