For example, local galleries – sometimes just a few blocks from his apartment -- would permit him to “test drive” paintings on the walls of his Park Avenue duplex. After deciding to purchase the paintings, he’d direct them to be shipped to the addresses of companies he controlled in Delaware and New Jersey. Within hours or minutes after arriving at those addresses, the indictment alleges, the paintings were sent right back to his apartment.
He allegedly used a similar method to avoid New York state sales tax on a $645,000 pair of diamond earrings from a merchant he met at an art fair in Maastricht, the Netherlands, directing the merchant to mail them to a Zukerman entity in New Jersey.
Although he lives on Park Avenue -- a similar apartment in his building is on the market for $16.5 million, a listing shows -- documents filed by his U.K. company list him as a resident of Monaco, the tiny tax haven on the French Riviera. The indictment doesn’t allege any improper behavior related to his status there.
The indictment also alleges that Zukerman spent $1 million in 2010 to purchase 250 acres of land on Black Island, off the coast of Maine. Although he had discussed making a donation to the group so that it could acquire the land, he instead bought the land himself. Nevertheless, he claimed a charitable deduction for that amount on his tax return.
Felony Counts
After IRS auditors questioned the deductions, Zukerman provided misleading documentation to his advisers to respond to the audit, the indictment says.
Zukerman is charged with three felony counts including tax evasion and “corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws,” along with wire fraud in connection with his New York State tax liability.
The indictment says he made interest payments to an entity he controlled, only to send those payments back into bank accounts controlled by him and his family members. Those transactions generated improper deductions on the tax returns filed by those family members.