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Ex-Singer Head Gets 4-Year Prison Term : Bilzerian Fined $1.5 Million in Securities, Tax Case

September 27, 1989|From Associated Press

NEW YORK — Former Singer Co. Chairman Paul A. Bilzerian was sentenced today to four years in prison and fined $1.5 million for federal securities and tax law violations related to three takeover attempts and a stock deal.

The sentence for Bilzerian, 39, a one-time corporate raider who made a stunning raid on Singer, was the largest handed down in the government's three-year crackdown on Wall Street crime.

U.S. District Judge Robert L. Ward also sentenced Bilzerian to two years' probation and 250 hours of community service for his conviction on nine felony counts involving deals in 1985 and 1986.

'In Short, He Lies'

"The lure of money has caused him--an intelligent young man--to lose what I perceive to be proper perspective," Ward said. "In short, he lies."

Bilzerian was convicted by a federal jury June 9 of securities fraud, conspiracy to commit tax fraud and filing false disclosure statements to the Securities and Exchange Commission.

The charges involved three failed takeover attempts, involving apparel maker Cluett, Peabody & Co., building supplies maker H. H. Robertson & Co. and Hammermill Paper Co., and another transaction of Armco Inc. stock.

Bilzerian, of Tampa, Fla., bowed his head and closed his eyes as Ward read the count-by-count verdict. His wife, Terri, and other family members sat in the front row of the courtroom at U.S. District Court in Manhattan.

Ward sentenced Bilzerian to four years and fined him $250,000 on each of six of the counts but ordered the prison terms to run concurrently.

Bilzerian's attorney, Arthur Mathews, said he plans to appeal.

Assistant U.S. Atty. David Brodsky cited Bilzerian's alleged "arrogance and utter disregard for the law" during the court proceedings and said a lengthy prison term would serve as a deterrent to similar crimes.

"He has been convicted of a pattern of fraudulent securities transactions," Brodsky told the judge. "Over an 18-month period Bilzerian committed serious securities crimes over and over again."

Mathews sought a suspended sentence on the ground that the conviction was Bilzerian's first, that the violations for which he was prosecuted had never before been tried criminally and that deterrence had already been achieved in the case.

Probe's First Jury Verdict

The Bilzerian conviction was the first jury verdict in the government's white-collar investigations. To date, the longest sentence was given to admitted felon Ivan Boesky, who is serving a three-year prison term.

The charges were derived from information supplied by Boesky. None of the charges involved Bilzerian's $1.06-billion takeover of defense contractor Singer in 1988. The case was the first to prosecute illegal stock "parking," in which securities ownership is disguised in order to dodge federal disclosure laws.

Bilzerian faced a maximum 45 years in prison and fines of $2.25 million.

He resigned as chairman of Singer on June 29 when the SEC filed a suit seeking to recover more than $31 million in illegal profits from Bilzerian for "numerous and serious" securities violations.

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