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Prosser's Wife Must Turn Over Millions In Cash, Jewelry and Art

A St. Thomas jury concluded last week that former Vitelco owner Jeffrey Prosser fraudulently transferred a fortune to his wife Dawn Prosser to hide money from his creditors, saying she must pay $14.9 million and hand over the ill-gotten baubles to a court-appointed trustee.

The jury found Prosser fraudulently gave his wife $2.4 million in cash to hide it from creditors before declaring bankruptcy and improperly gave her another half a million in cash after declaring bankruptcy.

More subtly than simply giving millions in cash "away" to his wife, the jury found Prosser hid a whopping $11.3 million by fraudulently giving it to his wife in the form of improvements to their Estate Shoys property. The cash, the home improvements and another $700,000 for goods from a fine furniture and art dealer, bring the jury award to $14.9 million.

The jury also found Prosser fraudulently transferred hundreds of thousands of dollars to Dawn Prosser in the form of jewelry awarding the trustee in Jeffrey Prosser’s personal Chapter 7 bankruptcy:

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— Chopard 18k white gold, ruby and diamond earrings;
— a Chopard 18k white gold, ruby and diamond necklace;
— a Chopard 18k white gold, ruby and diamond bracelet;
— a Chopard pendant and chain and a variety of other pieces of Chopard jewelry;
— a Kaufmann de Suisse platinum ring set; and
— some jewelry from Tiffany & Co. Schlumberger.

The jury also awarded the trustee a fortune in art:
— "Woman Carrying a Jug" painting by Camille Pissarro;
— "Water Carriers on High Road" painting by Camille Pissaro;
— "Une Crique a Saint Thomas, Antilles" painting by Camille Pissaro;
— "Paysage de la Martinique" painting by Charles Laval;
— "A Tropical Landscape" painting by Norton Bush; and
— several other etchings, prints and two nice pool tables.

Art varies widely in price, but a single Pissaro painting purchased by Jeffrey Prosser, not among those listed here, was sold at auction in 2008 for $4.1 million earlier in his protracted bankruptcy.

The jury was one of two empanelled to hear arguments in a joint civil trial in V.I. District Court before U.S. District Court Judge Juan Sanchez to decide fraudulent transfer suits filed by two different court appointed trustees.

One was from Chapter 7 Trustee James Carroll, who deals with Jeffrey Prosser’s personal finances; and the other from Chapter 11 Trustee Stan Springel, who deals with Jeffrey Prosser’s former corporate holdings, notably former Vitelco parent company ICC.

Springel’s attorneys argued all of the money and goods Jeffrey Prosser directed ICC to pay for actually just benefited himself—and not the company—and should therefore be awarded to the corporate creditors via the Chapter 11 trustee.

Carroll’s suit argued that whatever Jeffrey Prosser gave to his wife should be turned over to Jeffrey Prosser’s personal creditors, through the Chapter 7 trustee. Carroll already controlled Jeffrey Prosser’s share of the couple’s joint property, which constitutes most of the assets. So he was seeking roughly half what Springel sought. Either way the money largely goes to one creditor: the Rural Telephone Finance Cooperative (RTFC), which lent both Jeffrey Prosser and ICC more than half a billion dollars.

In February, U.S. Bankruptcy Judge Judith Fitzgerald ruled Jeffrey Prosser had the authority to make his companies pay him and his family members, that he did not hide the payments and for those reasons, the money was not fraudulently transferred from the company to Prosser himself. Guided partly by that ruling, the jury in the Chapter 11 case denied the Chapter 11 trustee’s claim to all of the funds transferred from ICC to both Jeffrey and Dawn Prosser.

At the same time, the jury in the Chapter 7 trustees’ lawsuit decided the funds Jeffrey Prosser then gave his wife were fraudulent transfers.

Immediately after the two verdicts, Dawn Prosser’s attorney Jeffrey Moorhead issued a press release announcing "a unanimous St. Thomas jury determined that the over $31 million in assets transferred by the ICC Companies to Dawn Prosser were transferred for fair value."

Based upon that press release and statements from Jeffrey Prosser himself, some news outlets have reported that Jeffrey Prosser won and has been exonerated of any wrongdoing.

Both the Prosser press release and news accounts neglect to mention the second jury verdict declaring Jeffrey Prosser personally fraudulently transferred millions of dollars to his wife to hide it from his creditors and that his wife must return the money, jewelry and art.

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