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Silenced Partner? The son of a bagel-shop owner sits in prison, convicted of murdering his parents over petty resentments. But now a judge is weighing new evidence that may link the crime to the victims' business ventures.
By Elaine Pofeldt

(FORTUNE Small Business) – On the day he was supposed to begin his senior year of high school, Martin Tankleff's life suddenly veered off course. Waking at 6:10 A.M. in his bedroom in Belle Terre, N.Y., a wealthy town on Long Island, he says he noticed that many of the lights in the house were on. He went to his parents' bedroom, which was dark and appeared empty. Then, he says, he saw that the burglar alarm was turned off. He looked in the office where his father, Seymour, 62, had played poker with friends the previous night. There he found his father covered in blood and gagging but still conscious. Seymour Tankleff's head had been bashed and his throat slit.

When Martin called 911, the operator told him to lay his father down, elevate his feet, and get a clean towel to apply pressure to the wounds. After moving Seymour to the floor and propping his feet on a pillow, Martin says he looked in the garage for his mother Arlene's car. Finding it there, he went back into his parents' darkened bedroom, where he says he discovered his mother dead on the floor. As with Seymour, her head had been smashed and her throat cut. The rescue crew arrived at the house at 6:25 A.M. and found Martin in the driveway in a sweatshirt and shorts, waving to flag them down.

When the police arrived, Martin told them he suspected Jerry Steuerman, his father's partner in several bagel shops, of committing the crime. The two had had a complicated business relationship and a friendship that had grown increasingly adversarial. Steuerman, then 49, owed Seymour several hundred thousand dollars at the time he was killed, according to testimony that would come out later. Steuerman was also the last person to leave the poker game the previous night. (Steuerman now lives in Florida and did not reply to repeated telephone messages and telegrams. FSB did reach his wife by phone, but she declined to comment. Throughout the investigation and trial he maintained his innocence.)

On the morning of the attacks, Sept. 7, 1988, the police were more suspicious of Martin Tankleff than of his father's business partner. According to the police report, Martin didn't seem as upset as they expected when they arrived, and he hadn't applied pressure to his father's wounds as the 911 operator had instructed. They brought the 17-year-old to the Yaphank, N.Y., police station for questioning, telling his father's business attorney, who had showed up at the scene, that they wanted to talk to Martin as a witness. He had no lawyer with him when a homicide detective began questioning him. According to the police report, the detective tricked Martin by saying that his father, who by then had lapsed into a coma, had been awakened by a dose of adrenaline and had accused his son of the crime. (Interrogation tactics such as these are generally legal.) Martin asked whether he could have blacked out and committed the crime without knowing what he was doing. He suggested that he could have been "possessed." He then confessed, citing petty complaints against his parents. Family members immediately hired a lawyer to try to get the confession thrown out. But the police believed his confession, and eventually so did a jury. In June 1990, Martin Tankleff was convicted of killing his parents and given a sentence of 50 years to life at Clinton Correctional Facility, a four-story, 2,880-inmate prison in Dannemora, N.Y., not far from Canada.

Normally, that would be the end of the story, but the Tankleff case is anything but normal. Martin may soon have another day in court. Late last year his attorneys filed a motion asking a judge to vacate his conviction based on new evidence. Another convict recently came forward to say that he drove two men to the Tankleffs' house on the night Seymour and Arlene were murdered and picked the men up later, after which one of them burned his bloody clothes. Suffolk County prosecutors say the convict's story isn't believable, but ultimately that's up to a judge to decide. (A ruling could come as soon as this spring.) The new evidence could be enough for the judge to vacate Martin's conviction and set him free. But even if the ruling goes against him, Martin can file an appeal to a higher court.

"There's no easy way to cope with being incarcerated for crimes I had nothing to do with," Martin wrote from prison, in response to questions sent him from FSB. "I have gained my strength from my upbringing and from the family, friends, and many others who support me."

The crime for which Martin Tankleff has been jailed was a bloody one, sensational enough to occasion one of the first televised trials. Regardless of the case's ultimate outcome, it has--fairly or not--again entangled Seymour Tankleff's former business partner, Jerry Steuerman. And their story unfolds as an extreme example of a common pitfall for entrepreneurs: failed business partnerships. There were about 2.1 million partnerships in the U.S. in 2001, the most recent year for which statistics are available, according to the IRS. Almost half of them fall apart, estimates Andrew Sherman, a lawyer at McDermott Will & Emery in Washington, D.C., who has advised hundreds of small-business owners. The splits are often caused by partners moving in different directions, perceived "infidelity" to the spirit of the partnership, or a silent partner who suddenly starts speaking up, says Sherman. These were the problems that eroded the relationship between Seymour Tankleff and Jerry Steuerman, according to members of the Tankleff family and Steuerman's testimony at Martin Tankleff's trial. "Business partnerships are like marriages, and in many cases they're more volatile," Sherman says. But, he adds, "you don't have love as a starting point. It's purely economic."

Seymour Tankleff came from a family with a deep entrepreneurial tradition. His father, who emigrated from Russia and was one of a long line of butchers, started a successful chain of poultry stores in Brooklyn, where Seymour worked for a few years after serving in the Navy during World War II. Looking to get into a cleaner line of work, he switched to selling insurance and opened his own agency, which he ran for decades. It was at the agency that he met his second wife, Arlene, who was a decade younger and worked as his secretary.

After marrying in the early 1960s, Seymour and Arlene settled in Belle Terre. Unable to conceive, they arranged to adopt their son, Martin, in 1971, upon his birth. As Seymour's business thrived and Martin grew, Seymour taught his son as much as he could about his work, even including him in meetings. At one point, they started a business together, in which Seymour ordered baseball cards for his son to sell at school. "I absolutely shared my father's passion for business," Tankleff wrote from prison. "That's one of the reasons I was so involved in many aspects of my father's ventures. I envisioned myself going into some kind of business, as my father had."

In the mid-1980s, Seymour sold the insurance firm for an estimated $1.5 million and started investing in other projects--everything from a struggling gym on Long Island to a few short-lived Broadway shows. "He just loved putting deals together," says Ronald Falbee, 54, a nephew of Seymour's who eventually became Martin's guardian and was executor of the Tankleffs' estate. "He had an insatiable appetite for all types of business." A tough negotiator, Seymour often set up ironclad contracts, secured by property or business interests, with borrowers desperate for cash, says Falbee.

Jerry Steuerman was one such borrower. He owned bagel shops in East Setauket and Stony Brook on Long Island; the two men met when Seymour came into one of his bagel shops as a customer, around the time he sold his insurance agency. They struck up a friendship that evolved into a business relationship. A flamboyant man who called himself the "bagel king," Steuerman liked to drive Lincolns, Cadillacs, and Ferraris. He was once arrested in 1978 for handcuffing himself to the front door of a Merrill Lynch office in Melville, N.Y., to protest what he claimed was his broker's failure to execute an order to purchase stock. (The charges were ultimately dropped and, without admitting any wrongdoing, Merrill Lynch paid him more than $2,000.)

In 1985, Steuerman found himself running short of the money he needed to complete an expensive house he was building in Belle Terre. He turned to Seymour for a $200,000 loan that May. The deal solved his short-term cash crunch, but he had to agree to terms that he considered extremely unfavorable. The clearest account of those terms came from Steuerman's testimony in court: He had to put up half of the bagel shop he owned in Stony Brook, N.Y., as collateral. He had the right to sell the business after five years, but for a price no less than $600,000. And he would continue running the store, while Seymour would act as a silent partner.

Steuerman later conceded that the terms seemed onerous to him, yet it wasn't long before he turned to Seymour for another loan, which he said he also needed for the house. In April 1986, Steuerman borrowed $150,000, this time signing over half of Strathmore Bagels in East Setauket as collateral. Steuerman relied on Tankleff's attorney to review the documents rather than hiring his own--a decision he would later regret. "I trusted him implicitly," he testified at Tankleff's trial. "He was a multimillionaire. I wasn't. I think I was foolish signing an agreement with somebody else's attorney and not having my attorney present."

But it took years for Steuerman to express his resentment over the loans. In the meantime he continued to socialize with Seymour and do business with him. The two played in a card game every Tuesday night called the After Dinner Club, and in 1986 they teamed up to open a third bagel store, T&S, in Jericho, N.Y. Seymour put up between $100,000 and $150,000, according to Steuerman's testimony, and Steuerman borrowed $50,000 from Seymour to contribute, signing a note in which he promised to pay it back. They didn't own the store for long, though--it was sold in 1987 for $200,000. Although Steuerman had run the store, he didn't receive any of the proceeds. "Seymour got back all of his money, and I didn't get back nothing because I didn't put in nothing," he testified.

Steuerman's financial problems continued throughout 1987. He had accumulated casino and tax debts, according to his testimony. He sold shares of two trotter horses he raced at the Meadowlands. Seymour and Arlene Tankleff bought a 50% stake in the horses. In June 1987, Steuerman's wife of 29 years died, and shortly after that he sold his house for $600,000, at a substantial loss. When he eventually tried to open a bagel store without Seymour, teaming up with one of his sons instead, Steuerman was surprised by the depth of Seymour's anger. "He was a father to me, and he started to be ... 100% businessman, which I understand because that's what we did," Steuerman testified. "But we were friends too, very close friends. It bothered me that Seymour was a very close friend, and that friendship was beautiful, and it just disintegrated."

Indeed, Tankleff family members say Seymour saw Steuerman's actions as a betrayal. "Seymour put up most of the money to keep him going in the bagel business," recalls Michael McClure, Arlene Tankleff's brother-in-law. "The idea was they would begin opening a chain." In June 1988, Tankleff family members believe, Seymour was preparing to call one of the notes Steuerman had signed for a loan. Steuerman had never been involved in any violent crimes, but Arlene told her family that she was worried that her husband's decision to demand repayment might trigger something in him, Martin later told police. "Steuerman's entire business life justified a much more careful review of him" by Seymour, says attorney Robert Gottlieb, who defended Martin Tankleff at the trial.

Despite the tensions between Seymour and Steuerman, they continued to play cards together. The night the Tankleffs were murdered, the After Dinner Club met in Seymour's office. The other men who played that night told police that the game broke up at 3 A.M. and that they all left before Steuerman.

What happened next remains unclear because of two versions of the story that Martin Tankleff gave police. During Martin's interrogation immediately after the killings, Suffolk County Police Detective James McCready asked him what should be done to the culprit. Martin said that the person needed psychiatric help. After police said--falsely--that Seymour Tankleff had come out of his coma to accuse Martin of the crime, Martin asked if he could have killed his parents while blacked out. "He said that maybe it wasn't him, but another Marty Tankleff that killed them," McCready, who has since retired, wrote in the police report. "He said he could have been possessed.... He said it was starting to come to him." The police read him his rights, and Martin described hitting his parents with a dumbbell and stabbing them with a kitchen knife.

Telling police he needed psychiatric help, Tankleff recited a litany of complaints that had caused him to attack his parents. He said that he'd been increasingly frustrated by their fighting, his mother's refusal to let him go away to college, his having to drive a "crummy old Lincoln," his lack of permission to use the family boat, and their insistence that his father's partner in the gym watch over him while they went on vacation. In response to police questioning, he said that he stood to inherit his father's estate, reportedly valued at more than $3.2 million. When McCready asked whether Martin would give them a written statement and videotaped confession, he agreed. Tankleff was in the middle of that process when Seymour's business attorney, Myron Fox, showed up and stopped the questioning.

Later that day Tankleff retracted what he'd said. Relatives rallied behind him, saying it was implausible that a 150-pound teenager could have killed his 190-pound mother and 250-pound father. Moreover, they didn't believe the motives he had cited to police. Michael McClure, Seymour's brother-in-law, said that when he had visited the Tankleffs a month before the crime, Marty had proudly driven them in the car that he told police he didn't like, had taken family members out on the boat he was supposedly banned from using, and had been excited about working out with his father's partner from the gym while his parents went on vacation. As for inheriting his father's wealth, his conviction for the crime would prevent that. "None of it made any sense," says McClure. (One family member--Shari Rother, Seymour's daughter from his first marriage--reportedly didn't support Martin through the trial, though Gottlieb, Martin's original attorney, pointed out that she was a beneficiary of the Tankleff estate and stood to gain more if he was convicted.)

Martin's relatives also say they thought Steuerman's behavior after the crime seemed suspicious. A week after Seymour was murdered, Steuerman shaved his beard and withdrew $15,000 from a joint account he shared with Seymour. He took a bus to Atlantic City and back north to Newark, N.J., then flew from Newark to Los Angeles under the pseudonym "Jay Winston." (Police discovered his car in a parking lot in Hauppauge, N.Y., reportedly with several suicide notes inside.) In California, Steuerman got a new hair weave and checked himself into a psychiatric retreat, and then into a series of motels. Police finally confirmed he was alive two weeks later when they tapped his girlfriend's phone and Steuerman called her. To show he was alive, he uttered a single code word, signifying his favorite flavor of ice cream: pistachio.

The Suffolk County Police Department, which declined to comment on the case, did not bring any charges against Steuerman. There was no physical evidence linking him to the crime, and Steuerman's explanation for his flight was that he was overwhelmed by stress. "At that time of my life my wife ha[d] just recently passed away a year before," he testified in Martin Tankleff's trial. "I was married for 29 years ... and my cash flow and my business was not what it used to be, and then the murder of Arlene and Seymour after that, and accusations by the son just--it got to me. I thought everybody would be better off just without me." Denying that he had killed the Tankleffs, he said that the only mistake he'd made in his life was excessive spending. "I was a poor man living like a millionaire," he testified.

After a nine-week trial and eight days of deliberations, the jury convicted Martin Tankleff of murdering his parents. "It is the one case--and I've handled many horrific crimes--that still causes sleepless nights, because he's innocent and should never have been convicted," says Gottlieb, Martin's attorney in the trial. Although Martin has been appealing the verdict since the day it was issued, he has never been able to reverse it.

That might soon change, though, thanks to the work of Jay Salpeter, 52, a retired New York City detective turned private investigator. After hearing about Salpeter from another inmate at his prison, Martin contacted him by mail four years ago and persuaded him to take his case. As Salpeter reviewed the evidence, he was intrigued by the possible involvement of a convicted burglar and sex offender named Joseph Creedon. In April 1989, Creedon gave an affidavit (submitted in post-trial motions but not in the original trial) saying that Todd Steuerman, Jerry's now-35-year-old son, had asked him to cut out Martin Tankleff's tongue as punishment for accusing Jerry Steuerman of the murders. When Creedon refused, the affidavit continued, Todd Steuerman shot Creedon in the arm. (Efforts to reach Todd Steuerman for comment were unsuccessful.)

Salpeter, the private investigator, started talking to people who'd known Creedon during the time of the murders, and he eventually found Glenn Harris--an inmate then serving time for a burglary. Harris and Creedon had been arrested together after a robbery on Long Island. Salpeter wrote to Harris to see whether he knew anything about the Tankleff case. When Harris wrote back that he did, Salpeter paid him a visit, bringing Harris's mother.

Glenn Harris said that he and Creedon were using drugs on Long Island the night the Tankleffs were murdered, and that Creedon asked for a ride to a certain location so that he could get some money. Harris agreed, and a friend of Harris's named Peter Kent, who lived nearby, showed up before they were leaving. Harris said he parked outside a house he wouldn't realize until later was the Tankleffs'. According to his version of events, Creedon and Kent went inside and emerged 15 minutes later, both winded. One man was carrying gloves, and the other later burned his clothes.

When Harris took a polygraph test that Salpeter arranged to verify his statement, he passed it, according to Salpeter. Harris never spoke up earlier, Salpeter says, because "at the time this happened, he was on parole, and his car was uninspected." But "it always bothered him," Salpeter says. "His motive for helping us is there is an innocent man in jail." Harris's attorney declined to comment, and FSB's attempts to locate Harris--who was released in January from Sing Sing Correctional Facility, where he had been serving time for a parole violation--were unsuccessful. Kent, who has been convicted of robbery in the past, told the Suffolk County prosecutor's office that he had committed burglaries with Harris in the past but not with Creedon. He also denied ever being in Belle Terre. FSB could not track Kent down for a comment.

Martin's attorneys note that Harris's statements corroborated an affidavit given in August 1994 by Karlene Kovacs, a friend of Creedon's. (The affidavit was presented at post-trial motions filed as part of Martin Tankleff's appeal.) Kovacs said that Creedon had told her he and "a Steuerman" hid in the bushes outside the Tankleff house the morning of the murders and that later they were covered with blood and had to get rid of their clothes.

Whether Harris's version of events in conjunction with the others will ultimately help Tankleff's case remains an open question. Leonard Lato, a former federal prosecutor who recently reexamined the case for the Suffolk County prosecutor's office, concluded that Harris's statement would not qualify as new evidence because Tankleff knew of Harris as far back as June 2002. (A defendant who fails to make a motion for a new trial within a year of discovering new evidence has not exercised due diligence, says Lato; Martin Tankleff waited 16 months.) Lato also says Harris's account doesn't establish Tankleff's innocence. "At best the statements demonstrate only that others in addition to Tankleff may have committed the murders," he wrote in a report responding to the new evidence. "They do not demonstrate that Tankleff did not commit the murders." Lato also says that Harris has given conflicting versions of his story, and that he has so far refused to testify without immunity from prosecution--something Lato's office won't grant to someone who may have committed a crime. As a result, he says, Harris's statement would be considered hearsay and inadmissible. Meanwhile Creedon is denying Harris's accusations. "It is totally a conjured-up story," says his attorney.

But Tankleff's attorneys say they're confident that the evidence will hold up in court and will create enough uncertainty about his guilt to get him released from prison. "This raises substantial doubt that Mr. Tankleff was involved in the crimes at all," says Barry Pollack, a partner with Nixon Peabody in Washington, D.C., who is representing Martin in the case pro bono. Pollack adds that the 12-month limit on new evidence doesn't apply to this situation. "I would disagree with Mr. Lato that there's any rule or requirement of due diligence," Pollack says. "New York State law says you may not imprison anyone for a crime he has not committed."

Tankleff remains cautiously optimistic. Over the years he has learned to be patient, says his cousin Falbee: "There is no anger in Marty. He is eternally hopeful. He pulls down a tremendous amount of strength simply because people are with him."