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Man Gets 18 Months for Tax Scheme

A former herbal remedy magnate conspired to evade $4 million in corporate taxes.

September 14, 2004|David Rosenzweig | Times Staff Writer

Former herbal remedy magnate A. Glenn Braswell, who won a controversial pardon from President Clinton, was sentenced Monday to 18 months in prison for conspiring to evade more than $4 million in corporate income tax.

Braswell could have received more than three years imprisonment, but federal prosecutors recommended leniency because of his cooperation in a case against two co-defendants and his restitution of more than $10 million, the amount his company owed in back taxes, plus interest and penalties.

In accord with a plea agreement reached earlier this year, the 60-year-old Braswell also agreed to pay the government another $9 million he owes for personal taxes from 1994 through 1997.

Appearing before U.S. District Judge Margaret M. Morrow, Braswell declined an invitation to address the court, an option customarily granted before sentencing.

Braswell founded Marina del Rey-based Gero Vita International, once described as the largest direct-mail marketer of dietary supplements. The company's advertisements promised relief from a host of ailments, ranging from arthritis to baldness to loss of sexual potency.

In 1983, Braswell spent seven months in prison after he was convicted of fraud and perjury stemming from misleading ads touting remedies for baldness and cellulite. But on Jan. 20, 2001, his last day in office, President Clinton granted Braswell a pardon, one of 140 he issued in the waning days of his administration.

It was later disclosed that Braswell had paid Clinton's brother-in-law, Hugh Rodham, $200,000 to lobby the White House. The president and his wife, Hillary Rodham Clinton, denied any knowledge of the payment and demanded that Rodham return the money.

At the time the pardon was granted, Braswell had been under investigation by the Internal Revenue Service for more than two years.

Another two years passed before Braswell was indicted along with William E. Frantz, a tax attorney from Murietta, Ga., and Robert B. Miller, a certified public accountant from Canyon Country.

Braswell was accused of evading corporate taxes by setting up a phony billing scheme in which a sham company he operated in Bermuda charged Gero Vita for the purchase of nonexistent raw materials purportedly used in the manufacture of dietary supplements. The phony business expenses lowered Gero Vita's taxable income.

Frantz was recently acquitted of charges that he helped Braswell evade payment of personal income taxes. Prosecutors also dismissed all charges against Miller in March, citing his failing health.

Braswell, who is free on bond, was ordered to surrender Jan. 10. Morrow recommended that he serve his sentence in the Miami area, where he currently resides. As a practical matter, he will actually serve less than a year because he spent seven months behind bars immediately after his arrest until he was able to make bail.

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