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Waksal starts serving prison term
Ex-ImClone CEO reports to minimum-security prison, starts 87-month sentence for securities fraud.
July 23, 2003: 1:23 PM EDT

NEW YORK (CNN/Money) - Sam Waksal -- the ex-ImClone CEO who pleaded guilty in a stock trading scandal -- arrived at a minimum-security prison in Pennsylvania Wednesday to begin serving his seven-year, three-month sentence for securities fraud and perjury.

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See what former ImClone founder and CEO Sam Waksal's new schedule will be like in the Schuylkill Federal Correctional Institution.

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"I deeply regret the mistakes I've made that have brought me here today," he said in brief remarks to reporters after his brother Harlan drove him to the Schuylkill Federal Correctional Institution.

Waksal, who once dreamed of developing a blockbuster cancer drug, was sentenced last month after pleading guilty to securities fraud and perjury charges in an insider trading scandal that ensnared his friend Martha Stewart.

The 55-year-old scientist and businessman -- who became well known on the social circuits in New York and Washington as his wealth grew -- is the first chief executive sentenced as a result of the scandals that have rocked corporate America over the last two years.

Dan Dunne, public information officer for the Federal Bureau of Prisons, said Waksal will work from 7:30 a.m. to 3:30 p.m. five days a week, doing tasks usually given to new inmates such as cleaning pots and pans, mowing the grass, cleaning housing areas and mopping floors.

About 300 inmates are housed in the facility, sleeping in what Dunne called "military-style" rows of bunk beds with common toilets and showers. Each inmate has a personal locker but there is very little privacy, he said.

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The only perk allowed is 300 minutes of phone calls a month, excluding attorney phone calls. All personal calls are monitored. Fifteen to 20 hours of personal visits are allowed each month, with visitors being searched upon their arrival at Schuylkill.

Waksal tried to sell ImClone stock and tipped members of his family to sell their shares before it was announced that the Food and Drug Administration had rejected an application for Erbitux, a new cancer drug the company was developing.

Stewart, who sold almost 4,000 shares of ImClone before the news became public, shared the same broker as Waksal. She was indicted by a federal grand jury in June on obstruction of justice charges and faces civil insider trading charges from the Securities and Exchange Commission as well. She has denied any wrongdoing.

Harlan Waksal resigned as chief scientific officer of ImClone (IMCL: Research, Estimates) Monday, severing the biotech firm's ties with its scandal-ridden founders.

Ironically, ImClone said in June that it would resubmit its application for Erbitux in the second half of this year after clinical trials showed promising results. Its stock is now trading well above its lows, near levels unseen since shortly after the scandal broke in December 2001.  Top of page

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