Bingham v. Zolt

66 F.3d 553
CourtCourt of Appeals for the Second Circuit
DecidedSeptember 28, 1995
DocketNos. 621, 622, Docket 93-7695, 93-7709
StatusPublished
Cited by39 cases

This text of 66 F.3d 553 (Bingham v. Zolt) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bingham v. Zolt, 66 F.3d 553 (2d Cir. 1995).

Opinion

CARDAMONE, Circuit Judge:

Defendants Marvin Zolt, Zolt and Loomis, P.C. (collectively Zolt), and David Steinberg appeal from an amended judgment entered July 21, 1993 in the United States District Court for the Southern District of New York (Conboy, J.) that, after a jury trial, found defendants liable in damages to the estate of Robert Nesta (Bob) Marley for fraud, breach of fiduciary duty, and violations of civil RICO under 18 U.S.C. § 1962(b), (c), and (d) (1988). Bob Marley was the Jamaican singer-songwriter responsible for bringing the reggae sound to the world and, to his fans, still is reggae music. Even today, 15 years after his death from brain cancer, he continues to be the world’s best-selling reggae artist. He used his music as a vehicle to spread global messages of peace, brotherhood, African unity, and international morality. For his contributions to ending political violence in Jamaica, he was awarded in 1978 the United Nations Medal of Peace. It is particularly revealing of the perversity of human nature that such a person’s estate be plundered by the perfidy of his closest advisors. It is that duplicity that gave rise to the litigation before us on this appeal.

FACTS

A. Background

Robert Nesta (Bob) Marley died intestate on March 11, 1981 survived by his wife Rita and 11 children. Under Jamaican intestacy law his wife was entitled to 10 percent of his estate outright and held a life interest in another 45 percent of it. Marley’s 11 children were entitled to equal shares of the remaining 45 percent outright, plus a remainder interest in Rita’s 45 percent life estate.

For five years from the time of Marley’s death in 1981 until 1986, defendants David Steinberg, Marley’s attorney, and Marvin Zolt, Marley’s accountant, with the aid of his wife, Rita Marley, developed and implemented numerous schemes that allegedly diverted [557]*557foreign music assets and royalty income from Marley’s estate to themselves. Defendants argued that their activities in creating new corporations and transferring funds from the estate to a chain of international companies were aimed at minimizing the estate’s tax liabilities, leaving more to be distributed to Marley’s beneficiaries.

B. The Principal Schemes

Of the numerous schemes by which defendants diverted estate assets and income, only the four principal ones will be outlined.

1.Share Transfer Scheme. Before Bob Marley died he, individually, and his three wholly-owned British Virgin Islands companies (BVI Companies), received royalty payments and income from various recording and publishing contracts. The BVI Companies as personal assets of Marley would have become estate property upon his death, resulting in the estate’s receipt of all of the royalty income due him. But defendants advised Rita Marley to forge her husband’s signature on three documents transferring the ownership of the BVI Companies from Bob Marley to herself. The documents were pre-dated to 1978 to make it appear that Marley had made these transfers during his lifetime, thereby excluding them from estate property. Steinberg signed the documents as a witness.

Ownership of the BVI Companies was then transferred to a Netherlands Antilles company known as Music Publishing Companies of Bob Marley, N.V. (the NV or Netherlands Antilles Company), whose sole shareholder was Rita Marley. Later the BVI Companies were liquidated, their royalty-producing assets transferred to the NV Company and then, in turn, to a wholly-owned Dutch subsidiary, Bob Marley Music B.V. (the BV or Dutch Company). The result was that various amounts of royalty and other income rightfully belonging to the BVI Companies— and indirectly to the estate — were funnelled between bank accounts in the names of Steinberg, the NV Company, and the BV Company and subsequently transferred into Rita Marley’s personal account or into special escrow accounts set up in Zolt’s name.

2. The Almo Scheme. This scheme is set forth in a letter dated December 29,1981. It involved a signed agreement between Zolt, Steinberg, and Rita Marley not to report to the estate Bob Marley’s personal share of royalty checks received from Almo Music, a music administration company for Bob Marley’s song publishing activities. These royalty payments totalled about $1 million for the two years from the date of Marley’s death until 1983.

3. The Island Assignment Scheme. Under this plan Rita Marley forged her late husband’s signature on an assignment, again signed by Steinberg as a witness. The document, backdated to August 13,1980, assigned Bob Marley’s individual rights under contracts with Island Records to one of the BVI Companies, causing the royalties produced under those contracts to be transferred to the bank accounts of the NV Company and BV Company mentioned above, rather than to the estate.

4. The Rondor Scheme. This scheme was accomplished by assigning the assets of Tuff-Gong Productions Ltd. (Tuff-Gong Delaware), a company individually owned by Bob Marley that would have been estate property, to one of the BVI Companies. The assignment was dated as of November 30, 1980 but actually made after Bob Marley’s death. It stated that the assets were transferred for the alleged consideration of $100,-000, although the copyrights at issue generated millions in royalties from 1980 to 1985.

C. The Concealment

On December 17, 1981 letters of administration for Marley’s estate were issued to co-trustees Rita Marley, Mutual Security Merchant Bank & Trust Company, a Jamaican bank, and George Desnoes, a prominent Jamaican attorney. Mutual Security, acting through George Louis Byles, its managing director, had primary responsibility for administering the estate. At a meeting to examine the estate’s assets and liabilities, Steinberg told Byles that a large portion of Bob Marley’s assets had been transferred to others before his death. At a later meeting on January 4, 1982 where Byles, Rita Marley, Steinberg, and Zolt were present, Stein-[558]*558berg specifically indicated that the BVI Companies were not part of the estate because they had been transferred to Rita Marley before Bob Marley’s death.

On June 14, 1982 Byles called another meeting in Jamaica, attended by Zolt, Stein-berg, Desnoes, and Rita Marley. When Byles again inquired about the ownership of the BVI Companies, Steinberg gave him copies of the forged share transfers, dated June 6,1978, showing that Bob Marley transferred his shares in the companies to Rita Marley before his death. Steinberg and Zolt also represented to Byles that the assets of Tuff-Gong Delaware barely exceeded that company’s liabilities.

Defendants further led Byles to believe that Bob Marley had assigned his contract rights with Island Records to one of the BVI Companies. In accounting to the estate over the next six years, defendants reported only minimal amounts of royalty proceeds, failing to remit to the estate millions of dollars they had received and transferred to bank accounts of the NV Company, the BV Company, Rita Marley, Steinberg, and Zolt.

D. The Suit

On December 10, 1986 Mutual Security, in its capacity as administrator of the estate, filed the instant case against Zolt, Steinberg, and their affiliated firms.

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Bluebook (online)
66 F.3d 553, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bingham-v-zolt-ca2-1995.