ImClone founder Waksal pleads guilty to ducking taxes for art

Tuesday, March 4, 2003

The Associated Press

NEW YORK --In a scheme prosecutors described as pure greed, ImClone Systems founder Samuel Waksal admitted Monday to dodging $1.2 million in sales taxes on nine paintings he bought from a New York art gallery.

Waksal, 55, pleaded guilty in federal court to wire fraud and conspiracy, admitting he ducked the city and state taxes by having bills for the paintings sent to an ImClone office in New Jersey and the art shipped to his Manhattan apartment.

"This really wasn't about art. It was about greed," U.S. Attorney James Comey said. "Mr. Waksal could well afford to pay the taxes on these paintings."

Waksal, a friend of Martha Stewart, has already pleaded guilty to securities fraud in an insider-trading scandal involving his biotechnology company. Sentencing on all charges was set for May.

Waksal entered the plea before U.S. District Judge William H. Pauley, who asked him, "Did you understand, sir, that what you were doing was wrong and illegal?"

"Yes, I did, sir," Waksal answered.

Waksal said he bought the paintings, including works by Mark Rothko and Roy Lichtenstein, for $15 million. He said he paid for the paintings with wire transfers from his bank account to the gallery owner.

Last October, Waksal admitted tipping his daughter to dump company stock just before it plunged on bad news from the Food and Drug Administration. His plea covered securities fraud, bank fraud, conspiracy to obstruct justice and perjury.

Conduct by others

Waksal attorney Mark Pomerantz said his client has talked with the government about "securities trading conduct by other people" but stressed that he did not mean to imply Waksal had spoken about Stewart.

Stewart, the home-decorating maven, sold nearly 4,000 ImClone shares on Dec. 27, 2001, the day before the FDA announced it had declined to review the drug Erbitux. She has maintained she had a standing order to sell the stock if it dropped below $60.

Prosecutors declined to comment on other charges they are pursuing in the ImClone investigation.

In a statement Monday, Waksal said, "Only two things are important to me at this point -- my family and getting our cancer drug approved. Beyond that I simply look forward to the day when I can put all of this behind me and move on with my life."

Last June, former Tyco International CEO L. Dennis Kozlowski was indicted on charges of evading New York sales taxes on $13 million in art, including works by Renoir and Monet. Kozlowski has pleaded innocent.

Respond to this story

Posting a comment requires free registration: