NEW YORK (CNN/Money) -
Samuel Waksal, the former CEO of ImClone Systems, pleaded guilty Monday to charges that he failed to pay sales taxes on $15 million in art by Mark Rothko, Roy Lichtenstein, Willem DeKooning and other painters.
The two-count plea to federal conspiracy and wire fraud charges is separate from charges of insider trading and obstruction that Waksal also awaits sentencing on.
Waksal, who resigned from the biotechnology company last year, made Monday's plea before U.S. District Judge William H. Pauley in New York. He admitted to evading $1.2 million in sales taxes and faces a maximum of 10 years in prison.
U.S. Attorney James B. Comey and Kevin P. Donovan, the assistant director of the FBI's New York office, said Waksal, 55, bought the art from an unnamed Manhattan gallery. He then arranged to have it shipped out of state, to New Jersey, but actually received it at home in New York, Comey and Donovan said.
Samuel Waksal, the former ImClone CEO, pleaded guilty Monday to charges of evading taxes on art purchases. (File Photo: CNNfn)
The sales tax scheme recalls former Tyco International CEO Dennis Kozlowski, who was charged in June with cutting illegal deals to avoid more than $1 million in taxes on valuable paintings.
"There are only two things that are important to me at this point," Waksal said in a statement Monday. "My family and getting our cancer drug approved. Beyond that, I simply look forward to the day when I can put all this behind me and move on with my life."
The cancer drug Waksal referred to is Erbitux, which suffered a regulatory setback in December 2001 that sent ImClone shares tumbling. An investigation into events surrounding Erbitux has implicated Martha Stewart, who has not been charged with any crime.
A press release from the FBI and U.S. attorney's office said Waksal bought the art, worth $15.3 million, between June 22, 2000, and Oct. 26, 2001.
|The charges in full
Waksal said the gallery owner gave him fraudulent invoices addressed to an ImClone manufacturing plant at 22 Chubb Way, Sommerville, N.J., the authorities said. But Waksal admitted to receiving the artwork, subject to an 8.25 percent sales tax, at his residence in Manhattan.
"This wasn't about art, but about greed," said Comey. "That means taxpayers paid for it," Comey said.
The paintings include those by Mark Rothko, Cy Twombly, Richard Serra, Franz Kline, Francesco Clemente, Roy Lichtenstein, Francis Bacon and Willem De Kooning, the FBI and attorney general said.
Waksal, a co-founder of ImClone (IMCL: up $1.02 to $14.35, Research, Estimates), was indicted in August on obstruction of justice and bank fraud charges. Two months earlier, he was charged with securities fraud, conspiracy and perjury. Waksal pleaded guilty to six of 13 charges in October, without agreeing to a plea bargain with the government.
Prosecutors warned at the time they still could take Waksal to court over the remaining seven charges. He has been awaiting sentencing.
Waksal headed ImClone Systems in December 2001, when the FDA refused to review the application for Erbitux.
Prosecutors charged that Waksal tried to sell his ImClone stock before the setback became known. A friend of Waksal's, Martha Stewart, sold nearly 4,000 ImClone shares just before the news become public.
But Stewart has denied any insider knowledge, saying she had an advance agreement with her broker to sell when the shares hit a certain price.
In court Monday, Waksal's attorney said that Waksal met several times with government investigators and told them of stock trades by other persons but not Martha Stewart.
Waksal's sentencing date was postponed to May 29 from March 17 because of the new charges. Waksal has arranged with the government to pay the taxes owed, according to his lawyer, Mark Pomerantz.
-- Reuters contributed to this report