Prosecutors said he gave phony information to his accountants and lawyers who were representing him in an audit by the Internal Revenue Service. He also claimed to have donated $1 million to a conservation group to purchase land on Block Island in Rhode Island, when he actually bought the land outright himself.
In addition to pleading guilty, Zukerman agreed to pay $37 million to the IRS.
Lending Art
Zukerman launched his investment firm in the late 1980s after a 16-year run at Morgan Stanley, where he led the bank’s energy practice for a time. His major projects included partnerships with ConocoPhillips Co., Exxon Mobil Corp. and Kinder Morgan Inc. He was also active in philanthropy, funding a sociology professorship at his alma mater, Harvard University, and lending works from his art collection to the Metropolitan Museum of Art.
Authorities alleged that part of Zukerman’s tax evasion involved his art dealings, having $50 million worth of Old Masters paintings shipped to addresses in Delaware and New Jersey to avoid New York state sales tax. The paintings almost immediately ended up on the walls of his Park Avenue duplex. He also agreed to pay New York state $4.6 million.
In support of their sentencing position, prosecutors submitted emails between Zukerman and others coordinating the delivery of art to his New York apartment after it had been shipped to Delaware, and emails in which he openly discussed profits from a business deal that he didn’t declare to tax authorities.
In his defense, Zukerman submitted more than 100 letters from supporters vouching for his character, including one from Zbigniew Brzezinski, the U.S. national security adviser during the Carter administration, who presided over the marriage of Zukerman’s daughter and cited his "genuine patriotism." He also submitted a 2007 letter from the then-president of the Metropolitan Museum of Art, Emily Rafferty, thanking him for a $100,000 pledge.
The case is U.S. v. Zukerman, 16-cr-00194, U.S. District Court, Southern District of New York (Manhattan).
This article was provided by Bloomberg News.