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Waksal Pleads Guilty to More Tax Charges

ImClone's former CEO admits to conspiracy, wire fraud for evading levies on artwork.

March 04, 2003|From Reuters

Samuel Waksal, ImClone Systems Inc.'s former chief executive who is awaiting sentencing for insider trading, Monday pleaded guilty to additional charges of evading taxes on $15 million worth of art.

Waksal, appearing in federal court in New York, pleaded guilty to conspiracy and wire fraud for evading $1.2 million in sales taxes, joining former Tyco International Ltd. CEO L. Dennis Kozlowski, who was indicted on similar charges.

Each of the two new charges, which are not related to the biotechnology company Waksal founded, carries a possible prison term of five years.

The scheme involved nine works by artists such as Roy Lichtenstein and Willem de Kooning, which were valued at about $15 million, prosecutors said. Waksal allegedly had the works shipped to an ImClone manufacturing facility in New Jersey to avoid New York's sales tax.

The paintings then were redirected to his New York apartment, said U.S. Atty. James Comey. At other times, Waksal did not have the paintings shipped to New Jersey but simply had the bill sent there, he said.

"This wasn't about art but about greed," Comey said.

One of the paintings alone was worth the amount of tax Waksal evaded.

"That means taxpayers paid for it," Comey said.

Waksal was at the center of an insider trading scandal that involved family and friends, including home decorating expert Martha Stewart.

He attempted to sell a huge block of his company stock in December 2001 just before U.S. regulators rejected ImClone's application to sell its experimental cancer drug Erbitux, news that sent ImClone shares plummeting.

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