S.E.C. v. Antar
| Decision Date | 17 November 2000 |
| Docket Number | No. 93-CV-3988 (HAA).,93-CV-3988 (HAA). |
| Citation | 120 F.Supp.2d 431 |
| Parties | SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. Sam M. ANTAR, Allen Antar, and Benjamin Kuszer, Defendants, and Rori Antar, Sam A. Antar, Michelle Antar, Adam Kuszer, Sam Kuszer, Simon Kuszer, Rose Antar, and Sam M. Antar, Relief Defendants. Securities and Exchange Commission, Plaintiff, v. Rose Antar, Ellen Antar Kuszer, Jill Antar, R.A.S. Partnership, L.P., and S.T. Partnership, L.P., Relief Defendants. |
| Court | U.S. District Court — District of New Jersey |
Susan C. Cassell, Office of the United States Attorney, Newark, NJ, for Plaintiff.
Bruce I. Goldstein, Saiber, Schlesinger, Satz & Goldstein, Newark, NJ, Peter J. Kurshan, Chase Kurshan Suhr Weidenfeld Herzfeld & Rubin, LLC, Livingston, NJ, Joseph L. Cook, Law Offices of Joseph L. Cook, Roseland, NJ, Solomon E. Antar, Brooklyn, NY, Shari B. Kibel, Tenzer Greenblatt LLP, New York City, for Defendants.
This matter comes before the court on the motion of plaintiff Securities and Exchange Commission ("SEC") for summary judgment on its claims against relief defendants Rose Antar, R.A.S. Partnership, L.P. and S.T. Partnership, L.P. The relief defendants oppose the motion on the grounds that it is both premature and without merit. For the reasons set forth below, plaintiff's motion for summary judgment is granted.
The details of the extensive securities fraud perpetrated by defendant Sam M. Antar and others have been described at length in this court's earlier opinions and need not be reiterated here. See SEC v. Antar, 97 F.Supp.2d 576 (D.N.J.2000); SEC v. Antar, 15 F.Supp.2d 477 (D.N.J. 1998). In September and October of 1997, this court conducted a bench trial to determine the liability of several defendants and relief defendants for securities fraud in connection with the sale of stock in Crazy Eddie, Inc. ("Crazy Eddie"). In an opinion issued on July 15, 1998, this court found in favor of the SEC on all of its claims and held that Sam M. Antar, Allen Antar and Benjamin Kuszer engaged in insider trading in connection with their sales of stock in Crazy Eddie, thus violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and SEC Rule 10b-5. The court further ruled in favor of the SEC on all of its claims against relief defendants Rori Antar, Sam A. Antar, Michelle Antar, Adam Kuszer, Sam Kuszer and Simon Kuszer. These relief defendants were found to have been unjustly enriched by funds obtained through the defendants' elaborate cash-skimming and insider trading scheme. The court held that the relief defendants had no legitimate claim to the fraudulent stock sale proceeds generated on their behalf. Thus, this court held that Sam M. Antar, Allen Antar, Benjamin Kuszer and the six relief defendants would be required to disgorge all illegal profits.
On December 1 and 4, 1998, the court held an evidentiary hearing on the amounts of disgorgement to be paid by the defendants and relief defendants. Before the court rendered a decision on that issue, a consent judgment was entered against relief defendants Adam Kuszer, Sam Kuszer and Simon Kuszer in favor of the SEC. See Order of March 20, 2000. Thereafter, on April 27, 2000, this court issued an opinion setting forth the amounts of illegal profits and pre-judgment interest to be disgorged by the defendants and the remaining three relief defendants. See SEC v. Antar, 97 F.Supp.2d at 587-88. Final judgment was entered against defendants Sam M. Antar, Allen Antar and Benjamin Kuszer and relief defendants Rori Antar, Sam A. Antar and Michelle Antar on May 15, 2000. Sam M. Antar was ordered to disgorge $15.087 million plus $42,423,642 in pre-judgment interest. Allen Antar was ordered to disgorge $3.438 million plus $8,473,045 in pre-judgment interest. Benjamin Kuszer was ordered to disgorge $850,000 plus $2,456,240 in pre-judgment interest. Relief defendants Rori, Sam A. and Michelle Antar were each ordered to disgorge $425,000 plus $303,805 in pre-judgment interest.
Meanwhile, on October 6, 1999, the court granted the SEC leave to file an amended and supplemental complaint asserting new claims against additional relief defendants. On October 7, 1999, the SEC filed the Amended and Supplemental Complaint. The SEC alleged that prior to the 1997 trial in this action, various assets were transferred from the defendants to relief defendants Rose Antar, Ellen Antar Kuszer, Jill Antar, R.A.S. Partnership, L.P. and S.T. Partnership, L.P. The SEC asserted that the transfers were fraudulent under New Jersey's Uniform Fraudulent Transfers Act and that the relief defendants were unjustly enriched by the transfers. The SEC requested that the transfers be voided as fraudulent, that the assets be placed in a constructive trust and that the relief defendants convey title to the assets or disgorge the value of the assets. On October 15, 1999, the SEC filed a motion for summary judgment on the claims set forth in the Amended and Supplemental Complaint. The court heard oral argument on the motion on June 16, 2000.
The SEC's claims against two of the five relief defendants named in the Amended and Supplemental Complaint have since been resolved. Final judgment by consent was entered against relief defendant Ellen Antar Kuszer on February 28, 2000. Relief defendant Jill Antar was never served with the summons and Amended and Supplemental Complaint and the SEC voluntarily dismissed the action against her. This court entered an order dismissing the action against Jill Antar on September 28, 2000. Thus, the SEC's only outstanding claims are against Rose Antar, R.A.S. Partnership, L.P. and S.T. Partnership, L.P. (hereinafter "relief defendants").
The SEC's claims pertain to several transfers of property by defendant Sam M. Antar to relief defendant Rose Antar in 1991 and 1997. The SEC alleges that after several of the transfers, Rose Antar, in turn, transferred the assets to herself and her daughter as trustees and to the entities R.A.S. Partnership, L.P. and S.T. Partnership, L.P. The alleged 1997 transfers are as follows:
On April 8, 1997, Sam M. Antar transferred his 25 percent interest in S & E Realty Partnership to Rose Antar. (10/27/98 Sam M. Antar Interrogatory Responses, attached as Exhibit 1 to the Declaration of Richard E. Simpson ("Simpson Dec.") at 4). This partnership is the nominal owner of a piece of real estate in Nogales, Arizona. (Id.) Sam M. has estimated his partnership interest to be worth $175,000. (Id.) His interest is now purportedly owned by the S.T. Partnership, L.P. (11/11/98 Sam M. Antar Dep., Simpson Dec. Exh. 2 at 90). The purported owner of S.T. Partnership is Rose Antar.
On April 9, 1997, Sam M. Antar conveyed to Rose Antar the former family residence at 2146 East Third Street in Brooklyn, New York. (4/9/97 Deed, Simpson Dec. Exh. 3). The market value of the property for tax purposes is $270,000. (Simpson Dec. Exh. 1 at 4). Sam M. claims that he transferred the property to Rose (Simpson Dec. Exh. 2 at 93).
On April 30, 1997, Sam M. Antar transferred his 50 percent interest in an entity called "S & E Realty, Inc." to Rose Antar. (Simpson Dec. Exh. 1 at 4). This corporate entity is the nominal owner of real property located at 68 Roosevelt Avenue in Deal, New Jersey. (8/25/98 Mortgage, Simpson Dec. Exh. 4). Sam M. has estimated that his 50 percent interest in S & E Realty, Inc. is worth $750,000 (11/11/98 Letter from Adam S. Ravin to Richard E. Simpson, Simpson Dec. Exh. 5). On August 25, 1998 Rose Antar, purportedly on behalf of S & E Realty, Inc., encumbered 68 Roosevelt Avenue by granting a $500,000 mortgage to Saiber, Schlesinger, Satz & Goldstein.1 (Simpson Dec. Exh. 4).
On May 15, 1997, Sam M. Antar transferred to Rose Antar his interest in his residence at 717 Ocean Avenue, Unit No. 710, and Cabana No. 46, West End, New Jersey. (5/15/97 Deed, Simpson Dec. Exh. 6). On the same day, Rose transferred the entire property to herself and Ellen Antar Kuszer, as trustees of the "Rose Antar Qualified Personal Residence Trust # 1 dated May 15, 1997." (5/15/97 Deed, Simpson Dec. Exh. 7). Sam M. has estimated his one-half interest to be worth $225,000. (Simpson Dec. Exh. 1 at 3). In the two years since he transferred his interest to Rose, Sam M. has continued living in the residence.
On May 15, 1997, Sam M. Antar transferred to Rose Antar the commercial property located at 2155 route 22 West in Union, New Jersey (5/15/97 Deed, Simpson Dec. Exh. 8). He has estimated that the property is worth $950,000. (Simpson Dec. Exh. 1 at 4). On the same day that Sam M. recorded his transfer of the property in the Union County, New Jersey clerk's office, Rose conveyed the property to the "R.A.S. Partnership, L.P." (8/8/97 Deed, Simpson Dec. Exh. 9). The mailing address of this partnership is Sam M. and Rose Antar's residence.
On May 15, 1997, Sam M. Antar transferred to Rose Antar his interest in a condominium at 19667 Turnberry Isle South, Units Nos. 18-D and CA-11, in Dade County, Florida. (5/15/97 Deed Simpson Dec. Exh. 10). On the same day, Rose transferred the entire property to herself and Ellen Antar Kuszer, as trustees of the "Rose Antar Qualified Personal Residence Trust # 2 dated May 15, 1997." (5/15/97 Deed, Simpson Dec. Exh. 11). Sam M. has estimated his one-half interest to be worth $180,000. (Simpson Dec. Exh. 1 at 4). He continues to use the transferred property as a vacation home.
The SEC alleges earlier transfers as well. The SEC asserts that in 1991 Sam M. Antar transferred over $1.7 million of securities to Rose Antar. Specifically, on March 15 and 18, Sam M. transferred securities worth $464,879 from his brokerage account at Shearson Lehman Brothers to a brokerage account in Rose's name. (Sam M. Antar trading records, ...
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