MIAMI — Industrialist Victor Posner, one of the nation's highest-paid businessmen, was convicted Friday of evading $1.2 million in federal income taxes on a gift of 22 acres to a small Christian college.
Jurors deliberated 14 hours over two days before returning the verdict of guilty on all 10 counts. The Miami Beach investor now faces up to 40 years in prison when sentenced Sept. 19 by U.S. District Judge Eugene P. Spellman.
Posner, who clenched his jaw when the verdict was read, was allowed to remain free pending appeal.
Posner, 67, was charged with four counts of income tax evasion, five counts of making false statements and one count of conspiracy to defraud the government. The prosecution said he evaded taxes by inflating the value of two tracts of land he donated to Miami Christian College.
$12 Million in Salary, Benefits
In closing arguments Wednesday, defense attorney Edward Bennett Williams said the tax evasion dispute should have been settled between Posner and the Internal Revenue Service. He challenged the jurors to convict Posner of everything or nothing.
Posner, chairman of DWG Holding Co., last year was called the nation's highest-paid executive by Business Week magazine, with a reported $12.7 million in salary and benefits. According to Williams, Posner paid a higher percentage of his income to the government--67% of $8.2 million in taxable income that he earned from 1975 to 1979--than almost any American.
Prosecutors said Posner's gross income in that time was $13 million.
The charges against him stemmed from tax deductions on two parcels: 16 acres appraised for tax deductions at $125,000 per acre and assessed for property taxes at $7,500 per acre in 1975, and six acres appraised at $175,000 per acre and assessed at $9,000 per acre in 1978.
Williams emphasized that Posner's deductions on the land were justified because he steadfastly believed that the land was suited for a shopping center even though it carried residential zoning.
Dropped Out of School at 13
Posner had repeatedly undergone IRS audits without prosecution.
Posner, who dropped out of school in Baltimore at age 13, made his first million by age 25 through canny investments in real estate. Later, his aggressive investments and mergers built his present network of more than 40 companies, forming a $4-billion, multifaceted empire.
Posner came to Miami Beach in 1949 for health reasons and has lived here ever since. Twice divorced, he has four children, two of whom are in his businesses, and five grandchildren. His personal fortune is estimated to be $100 million.
So many people turned up for closing arguments Wednesday that the proceedings were piped to loudspeakers in the lobby. Most were local attorneys who wanted to watch Williams, a partner in the Washington firm of Williams, Connally & Califano and principal owner of the Baltimore Orioles baseball club.