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HomeNewsArchivesJudge Denies Prosser Perjury Motion Against Valet

Judge Denies Prosser Perjury Motion Against Valet

Jeffrey Prosser, the former CEO and owner of Innovative Telephone, has lost yet another court battle.

Prosser had sought to persuade U.S. Bankruptcy Judge Judith Fitzgerald to refer Arthur Stelzer, his former valet, to the U.S. Attorney for an investigation of alleged perjury. Stelzer had testified in connection with Prosser’s reported attempts to destroy financial records at his mansion in Florida.

The judge denied Prosser’s motion in a multi-page order in which she was sharply critical of the action.

She ordered that the motion for referral be denied “with prejudice” because “ … the allegations in the motion … have not been substantiated and have been proven to be baseless and without merit regarding Arthur Stelzer.” She expanded on her objections to the motion at some length in the order.

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The legal term, “with prejudice,” means that the matter cannot be raised again without the explicit approval of the judge. When a motion is denied without prejudice, it can be revived at any time by the lawyer who lost the first time around.

In another unrelated court action in the same set of cases, James Carroll, the court-appointed trustee of Prosser’s personal finances, asked the judge to approve settlements of three secondary suits. In each suit, Carroll’s lawyers argued inappropriate payments had been made by Prosser using moneys that should have remained in the estate.

Carroll sought what are called “clawback payments” from third parties who had accepted the earlier transfers from Prosser. Two are credit card companies, and the third is devastated Wall Street giant AIG, bailed out at enormous expense by U.S. taxpayers. That firm had provided insurance for some of Prosser’s real estate.

Carroll’s original suits against the three firms totaled nearly $1.8 million; there was resistance from the companies involved and then sustained negotiations. In the end Carroll suggested settlement of the issues for an average of about 17 cents on a dollar. The settlements will, if approved by the judge, bring the bankruptcy estate $299,500.

One of the credit card companies was American Express. The other was identified on the title page of the motion as Bergdorf Goodman, Inc., the high-end Manhattan retailer. The store had been reported in earlier hearings as a place frequented by Prosser and his family for the purchase of much expensive clothing.

Elsewhere in the same document, the reference to the same set of transactions was to HSBC Nevada, N.A., the credit card company that had apparently been handling the credit card payments to Bergdorf Goodman.
The proposed settlements follow a long-running pattern in these proceedings; with the creditors getting much smaller returns than originally estimated or claimed. Other items:

• As of June 4, St. Croix attorney Jeffrey Moorhead had still not complied with a court order to report on his financial dealings with Prosser and his family. Moorhead was one of four Prosser attorneys order to do so by Bankruptcy Judge Judith Fitzgerald. The report was due May 29. Prosser’s other three attorneys have complied. (For further information, see Source article, "Questions Regarding Prosser’s Unpaid Lawyers Still Remain")

• That court order and several other matters will be on the agenda when the monthly omnibus hearing on the Prosser debts next convenes June 11 in Judge Fitzgerald’s home courtroom in Pittsburgh, Penn.

• While these hearings are usually held in Pittsburgh, and sometimes on St. Thomas, the regular monthly hearing in July will take place on July 7, at 9 a.m., at the U.S. District Court, St. Croix Division, 3013 Estate Golden Rock, St. Croix. It is believed to be the first time that one of these hearings has been held on that island.

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