Securities and Exchange Commission v. Sam M. Antar

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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Nos. 00-1820, 00-1836, 00-4357, 01-4100, 01-4208
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SECURITIES AND EXCHANGE COMMISSION
v.
SAM M. ANTAR; ALLEN ANTAR; RORI ANTAR;
SAM A. ANTAR; MICHELLE ANTAR; BENJAMIN
KUSZER; ADAM KUSZER; SAM KUSZER; SIMON
KUSZER; ELLEN ANTAR KUSZER; JILL ANTAR;
R.A.S. PARTNERSHIP, L.P.; S.T. PARTNERSHIP,
L.P.; ROSE ANTAR AND *ROSE ANTAR
Sam M. Antar; Allen Antar; Rori An
Sam A. Antar; and Michelle Antar,
Appellants in No. 00-1820;
Benjamin Kuszer,
Appellant in No. 00-1836;
Rose Antar; R.A.S. Partnership, L.
and S.T. Partnership, L.P.,
Appellants in Nos. 00-4357,01-4100
*(Amended Pursuant to Clerk’s 12/1
___________
On Appeal from the United States District Court
for the District of New Jersey
District Court Judge: The Honorable Harold A. Ackerman
(D.C. Civil No. 93-cv-03988)
___________
Submitted Under Third Circuit L.A.R. 34.1(a)
July 19, 2002
Before: McKEE, FUENTES, and ALDISERT, Circuit Judges
(Opinion Filed: August 2, 2002)
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OPINION OF THE COURT
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FUENTES, Circuit Judge:
These consolidated appeals arise from the civil enforcement actions commenced
by the Securities and Exchange Commission ("SEC") against three main defendants:
Sam M. Antar ("Sam"), Allen Antar, and Benjamin Kuszer. This action alleged insider
trading and securities fraud in transactions involving shares in Crazy Eddie, Inc ("Crazy
Eddie"). The original complaint, filed in 1993, also named various children and other
relatives of the main defendants as relief defendants. District Judge Ackerman, who had

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previously presided over a criminal matter stemming from the fraudulent schemes
perpetrated at Crazy Eddie, conducted a 22 day bench trial. The court held Sam and the
other main defendants liable for securities law violations. The court ordered the main
defendants and relief defendants to disgorge profits gained from the illegal stock trades
and ordered them to pay some prejudgment interest.
After the court found Sam liable, the SEC filed an amended complaint adding
Rose Antar, Sam’s wife ("Rose"), and others as additional relief defendants. The SEC
alleged that Sam fraudulently transferred real property and stocks to the Rose and other
new relief defendants over a six year period before and during the prosecution of the
SEC action against Sam. The District Court granted summary judgment to the SEC on
these claims, and ordered the relief defendants to reconvey the value of the transferred
properties to a court-appointed receiver.
Two groups of appellants challenge the District Court’s rulings. The main
defendants and three original relief defendants (Rori Antar, Sam M. Antar, and Michelle
Antar) argue that: 1) Judge Ackerman abused his discretion in denying their pre-trial
motion for recusal; 2) Judge Ackerman’s conduct during the bench trial displayed bias
against the defendants and necessitated recusal; 3) the court abused its discretion in its
"aggressive" questioning of witnesses during the bench trial; and 4) the court abused its
discretion in ordering the relief defendants to pay prejudgment interest. Rose, R.A.S.
Partnership, L.P., and S.T. Partnership, L.P. contend that: 1) the District Court lacked
ancillary jurisdiction to order Rose to pay the value of properties fraudulently transferred
to her by Sam; 2) the court erred in granting summary judgment to the SEC on the claims
of fraudulent conveyances by Sam to Rose; and 3) the court abused its discretion in
denying Rose a continuance before granting summary judgment. After carefully
considering the extensive and well-argued submissions in this case, we conclude that all
of the appellants’ arguments lack merit. We therefore will affirm the judgments of the
District Court in all respects.
I
Because we write only for the parties, we need not recite the lengthy factual
background of this case. We first address the claims of appellants Sam M. Antar, Allen
Antar, Benjamin Kuszer, Rori Antar, Sam A. Antar, and Michelle Antar. These
appellants first argue that Judge Ackerman erred by not recusing himself from this case
based on statements he made during the criminal sentencing hearing of Mitchell Antar,
who pled guilty to charges arising out of the Crazy Eddie frauds. Specifically, these
appellants focus on strong comments made by the court to Mitchell Antar in the court’s
explanation of its sentencing decision, App. at 313-14, to claim that Judge Ackerman
unfairly prejudged matters at issue in the current civil prosecution, and therefore that
recusal was required.
We review the court’s denial of the motion to recuse for abuse of discretion.
Securacomm Consulting, Inc. v. Securacom Inc., 224 F.3d 273, 278 (3d Cir. 2000). A
judge is required to recuse where his or her impartiality "might reasonably be
questioned." 28 U.S.C. 455(a). Yet under the extra-judicial source doctrine,
"[o]pinions formed by the judge on the basis of facts introduced or events occurring in
the course of the current proceedings, or of prior proceedings, do not constitute a basis
for a bias or partiality motion unless they display a deep-seated favoritism or antagonism
that would make fair judgment impossible." Liteky v. United States, 510 U.S. 540, 555
(1994). For example, we required the recusal of the original district judge in these Antar
proceedings because the judge "told the parties that his goal in the criminal case, from
the beginning, was something other than what it should have been, and, indeed, was
improper." United States v. Antar, 53 F.3d 568, 576 (3d Cir. 1995). A showing of
actual bias or prejudice is not required, as 455(a) focuses on the appearance of bias or
prejudice and "mandates an objective rather than a subjective inquiry." Id. at 574; see
also Liteky, 510 U.S. at 548.
Judge Ackerman’s comments were made in the context of the criminal sentencing
of a defendant who had pled guilty. Therefore, the appellants’ allegation of bias stems
from a prior legal proceeding, not an extra-judicial source, and the statements were based
on the uncontested facts of the criminal case before the court. The sentencing involved

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none of the defendants in the current case. The court merely explained the terms of its
sentence based on the facts before it, and did not go so far as to suggest an improper
motive or deep-seated antagonism which would unduly undermine the fairness of the
court’s judgment in the current case.
Appellants argue that the court’s use of the phrases "you people" and "you and
your co-conspirators" proves that its comments were not limited to Mitchell Antar, and
that the court’s acceptance of the SEC’s view of Mitchell Antar’s actions suggests to a
reasonable observer that the court would align itself with the SEC in the instant civil
proceedings. However, the court’s reference to other "co-conspirators" could reasonably
be seen as a reference to Eddie Antar, who was sentenced prior to Mitchell Antar.
Finally, it is true that some of the transactions and other facts to which Mitchell and
Eddie Antar admitted by pleading guilty became disputed issues in the instant civil case.
Yet these facts were uncontested in the prior criminal proceeding by virtue of the guilty
pleas, and Judge Ackerman’s acceptance of the undisputed record in that context was not
binding in this case and cannot reasonably be seen as "prejudging" the arguments in the
instant case.
Alleged bias derived from prior judicial proceedings will "rarely be grounds for
recusal." Securacomm Consulting, 224 F.3d at 278. We find no evidence here to
warrant departing from that general rule. Judge Ackerman’s remarks do not show a
deep-seated favoritism or antagonism that would make fair judgment impossible against
the defendants in this case. The District Court did not abuse its discretion in refusing to
recuse itself.
Appellants also argue that Judge Ackerman’s conduct during the bench trial
validated their pre-trial allegations and mandated recusal. Appellants did not respond to
the SEC’s contention that appellants never moved for recusal on this basis before the
District Court, so we review for plain error. Antar, 53 F.3d at 573. While appellants
charge that the court’s "aggressive" questioning and "interference" with cross-
examination transformed him into an "advocate" of the SEC, our review of the trial
record indicates only that Judge Ackerman took an active role in managing the trial and,
as the finder of fact, testing the credibility of witnesses. The Supreme Court has held that
"judicial remarks during the course of a trial that are critical or disapproving of, or even
hostile to, counsel, the parties, or their cases, ordinarily do not support a bias or partiali
challenge" unless they stem from an extra-judicial source or reveal "such a high degree
of favoritism or antagonism as to make fair judgment impossible." Liteky, 510 U.S. at
555. Some of the court’s comments indeed were highly critical. However, taken
together, the court’s conduct during trial does not show such an all-encompassing
antagonism to the defendants as to make a fair judgment impossible.
Just as the court’s active questioning of witnesses did not provide a ground for
recusal, it did not exceed the court’s authority under Federal Rule of Evidence 614(b).
Rule 614(b) allows the court to interrogate witnesses. The court’s power is not without
limits, however: "[t]he trial judge must not ’abandon his proper role and assume that of
an advocate. . . .’" United States v. Wilensky, 757 F.2d 594, 597 (3d Cir. 1985) (quoting
United States v. Beaty, 722 F.2d 1090, 1093 (3d Cir. 1983)). While we have not adopted
any "absolute, rigid rule... concerning the limitations of the trial judge’s participation,"
we have accepted the guidance of the Eighth Circuit’s view that "’in order to reverse on
grounds of excessive judicial intervention, the record must either ’disclose actual bias on
the part of the trial judge (or) leave the reviewing court with an abiding impression that
the judge’s remarks and questioning of witnesses projected to the jury an appearance of
advocacy or partiality.’" Id. (quoting Warner v. Transamerica Ins. Co., 739 F.2d 1347,
1351 (8th Cir. 1984) (citation omitted)).
Here, because the court presided over a bench trial, there was no jury which the
court’s conduct could have adversely affected. We have already concluded that the
court’s aggressive questioning did not reveal "actual bias" sufficient to mandate recusal.
This case involved complicated financial transactions and focused significantly on
credibility determinations, so the court’s active role facilitated its management of the
bench trial and resolution of the issues. We therefore find that the court did not exceed
its authority in its questioning.
Finally, appellants argue that the court abused its discretion in ordering relief
defendants Rori Antar, Sam M. Antar, and Michelle Antar to pay prejudgment interest.
We review a district court’s determination to require the payment of prejudgment interest

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for abuse of discretion. Ambromovage v. United Mine Workers of America, 726 F.2d
972, 982 (3d Cir. 1984). The district court may exercise this discretion upon
"’considerations of fairness’" and prejudgment interest may be denied "’when its
exaction would be inequitable.’" Id. (quoting Board of Commissioners of Jackson
County, Kansas v. United States, 308 U.S. 343, 352 (1939)).
The court observed that Rori Antar, Sam M. Antar, and Michelle Antar were
minors who did not control their Crazy Eddie shares and were unaware of the frauds
perpetrated at Crazy Eddie. Eddie Antar, who knew of the frauds and thus had inside
information, sold their shares in his role as custodian under the Uniform Gifts to Minors
Act. Therefore, the court did not require these relief defendants to pay prejudgment
interest for the entire period between the stock sale and the judgment. Instead, the court
ordered them to pay prejudgment interest only from the time the complaint was filed,
partly because at that time they were on notice that their Crazy Eddie profits might have
been illegally gained.
The court clearly considered interests of fairness. It noted that requiring these
relief defendants to pay prejudgment interest for the entire fourteen year period between
the time of the stock sales and the judgment would be "particularly inequitable" because
they "neither substantively participated in the litigation process nor caused the delays."
App. at 178. Yet because they still derived unjust enrichment from the frauds, the court
also found that fairness dictated that some prejudgment interest was required. Its
determination to require prejudgment interest for the period following the filing of the
complaint was the court’s "admittedly imprecise" effort to limit prejudice to the relief
defendants while securing compensation for the illegal profits. Id. at 179. We find no
reason to disturb the court’s considered exercise of discretion to balance the equities and
reach a fair result.
II
We next consider the arguments of appellants Rose Antar, R.A.S. Partnership,
L.P., and S.T. Partnership, L.P. They first argue that the District Court lacked ancillary
jurisdiction over them to enforce its judgment against Sam by ordering his wife Rose to
pay the value of securities and other property transferred to her by Sam, including the
value of some assets Rose no longer owns, along with prejudgment interest. As the SEC
notes, appellants do not seem to challenge the court’s jurisdiction to order the
reconveyance of actual property fraudulently transferred by Sam to Rose. Indeed, the
Supreme Court has approved of such jurisdiction. See Peacock v. Thomas, 516 U.S.
349, 356 (1996) (approving the exercise of "ancillary jurisdiction over a broad range of
supplementary proceedings involving third parties to assist in the protection and
enforcement of federal judgments including... prejudgment avoidance of fraudulent
conveyances"). Instead, appellants argue that the court’s order goes "well beyond the
avoidance of Sam’s transfers to Rose" by requiring Rose to pay from her own personal
assets. In essence, Rose argues that the court had no authority to order not just a
reconveyance of fraudulently transferred assets but also to pay the money value of those
assets.
The Supreme Court in Peacock held that federal courts do not have ancillary
jurisdiction over claims which seek to "impose an obligation to pay an existing federal
judgment on a person not already liable for that judgment." Peacock, 516 U.S. at 357.
In other words, a court may not use its ancillary jurisdiction to impose liability on a third
party for a judgment against a prior defendant. However, as the District Court observed,
here the SEC only "seeks to reach assets belonging to the judgment debtor but found in
the hands of the relief defendants." App. at A18. For the reasons substantially stated by
the District Court in its opinion dated November 17, 2000, we conclude that appellants’
arguments lack merit and that the court had jurisdiction to issue its orders for Rose Antar
and the other appellants to pay the value of properties fraudulently conveyed to them by
Sam. App. at A16-A19.
Appellants next argue that the court erred in granting summary judgment to the
SEC because the deposition testimony given by Sam regarding his insolvency before his
transfers to Rose lacked credibility and was insufficient to support a finding in favor of
the SEC. Because they claim that the SEC never met its burden to make a prima facie
showing on the elements of its case, appellants argue that the burden never shifted to
them to show specific facts establishing a genuine issue of material fact. Indeed,

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appellants do not make such a showing, but rather attack the evidence offered by the
SEC namely Sam’s testimony as, based on the District Court’s own findings and
comments, lacking all credibility.
As we have held, "[i]t is by now axiomatic that ’a nonmoving party... cannot
defeat summary judgment simply by asserting that a jury might disbelieve an opponent’s
affidavit to that effect.’" Schoonejongen v. Curtiss-Wright Corp., 143 F.3d 120, 130 (3d
Cir. 1998) (quoting Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir.
1989)). "[I]f a moving party has demonstrated the absence of a genuine issue of material
fact--meaning that no reasonable jury could find in the nonmoving party’s favor based on
the record as a whole--concerns regarding the credibility of witnesses cannot defeat
summary judgment. Instead, the nonmoving party must ’present affirmative evidence in
order to defeat a properly supported motion for summary judgment.’" Id. (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57 (1986)).
Here, appellants do not present any affirmative evidence, and seek to defeat
summary judgment solely on the basis of the lack of believability of Sam’s deposition
testimony. Appellants seem to argue that because Sam’s testimony was not credible, the
SEC did not meet its burden, and therefore appellants did not have to present any
affirmative evidence. Yet, as the District Court held, Sam’s testimony and inferences
therefrom helped establish the SEC’s prima facie case, and appellants’ response only that
the testimony was not believable is insufficient. "In this situation, it may be said that th
record as a whole points in one direction and the dispute is not ’genuine.’" Id. (quoting
Matsushita Elec. Co. v. Zenith Radio Co., 475 U.S. 574, 586 (1986)). We reject
appellants’ other arguments on this issue. After our plenary review of the record, we
conclude that the District Court did not err in granting summary judgment to the SEC.
Finally, appellants argue that the court abused its discretion in denying Rose’s
request for a continuance under Federal Rule of Civil Procedure 56(f) so that she could
take further discovery and better enable her to oppose the SEC’s summary judgment
motion. We review for abuse of discretion. San Fillippo v. Bongiovanni, 30 F.3d 424,
432 (3d Cir. 1994). For the reasons substantially stated by the District Court in its
opinion dated November 17, 2000, we find that the court did not err in exercising its
discretion to deny a continuance. App. at A19-A20. The evidence which Rose sought
to discover could have been easily obtained from her husband Sam, rather than from the
SEC or some other party, and Rose had sufficient time following the SEC’s filing of its
summary judgment motion to take a deposition from her husband, obtain an affidavit
from him, or otherwise undertake discovery from Sam or others. See Contractors Ass’n
of Eastern Pennsylvania, Inc. v. City of Philadelphia, 945 F.2d 1260, 1263 (3d Cir. 1991)
(noting that "when the party seeking discovery has the information it seeks in its own
possession or can get it from a source other than the movant," court may deny motion for
continuance).
III.
For the foregoing reasons, we will AFFIRM the judgments of the District Court.
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TO THE CLERK OF THE COURT:
Kindly file the foregoing Opinion.
/s/ Julio M. Fuentes
Circuit Judg

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