MIAMI — In a surprise move, industrialist Victor Posner pleaded no contest Tuesday to charges of evading more than $1.2 million in federal income taxes by inflating the value of land donated to a Miami Bible college.
U.S. District Judge Eugene P. Spellman accepted the plea, ending a legal battle that started in March, 1979.
A 1986 conviction in the case had been set aside because of jury irregularities, and a retrial had been set for Nov. 2.
Posner, a 69-year-old Miami Beach multimillionaire and pioneer corporate raider whose holdings include controlling interests in Royal Crown Cola, Sharon Steel and Arby's, pleaded no contest to a total of 10 counts.
The charges included one count of conspiracy to evade income taxes, four counts of tax evasion and five counts of making false statements in a tax return.
May Owe $1.25 Million
His attorney, Edward Bennett Williams of Washington, said Posner's age was a factor in the plea. Williams said that if Posner had been convicted in a new trial, he could be before the court for sentencing after exhausting his appeals "at the age of 73."
On Tuesday, Spellman set sentencing for Dec. 4. Posner, who remains free on bond, faces penalties of up to 40 years in prison and fines of up to $75,000.
Prosecutors opposed the no-contest plea because it might prevent the government from succeeding in civil suits against Posner for taxes allegedly owed, said Neil Cartusciello, with the U.S. Attorney's office in New York.
Cartusciello estimated that the amount of back taxes and penalties owed by Posner could total $1.25 million.
When a defendant enters a no-contest plea, it is not an admission of guilt. Rather, he is stating that he will offer no defense. The defendant is then subject to being judged guilty and punished as if he had pleaded guilty or had been convicted. However, he retains the option of denying the same charge in another legal proceeding.
"You understand that if you enter this plea, it is a plea of guilty?" Spellman asked Posner after the plea was entered.
"Yes, I understand," Posner replied.
Posner, the son of a Russian immigrant who dropped out of high school in Baltimore, was named the highest-paid executive in the nation by Business Week magazine in 1985.
But his financial empire has shown signs of stress in the past few years and Posner sold off holdings to pay company debts. His Evans Products Co. and Sharon Steel filed for reorganization of debts under Chapter 11 of the U.S. Bankruptcy Code.
Indicted in 1982
Williams noted that the case started in 1979 with a civil proceeding. Posner was indicted in 1982 on tax evasion charges and filing false tax returns between 1975 and 1979. The government alleged that he evaded $1.2 million taxes by inflating the value of property he donated to Miami Christian College.
Miami real estate broker William Scharrer Jr. was charged in two counts with aiding and abetting Posner in tax violations. He was convicted in 1984 and sentenced to 18 months in prison, and is appealing.
Posner was convicted by a federal jury on July 18, 1986, but Spellman set aside the verdict and declared a mistrial, later disclosing that he had found, among other things, that one juror had actually driven out to see the property that the government claimed Posner had overvalued.