Tuesday, March 4, 2003

ImClone founder pleads guilty


Conspiracy, wire fraud alleged in buying 9 paintings

By Erin McClam
The Associated Press

NEW YORK - ImClone Systems founder Samuel Waksal pleaded guilty Monday to conspiracy and wire fraud, admitting that he avoided paying $1.2 million in taxes for nine paintings he purchased in the past three years.

Waksal, a friend of Martha Stewart, has already pleaded guilty in an insider-trading scandal.

The judge postponed Waksal's March 17 on the earlier plea until May 29 because of the new charges. Waksal remains free on bail.

Waksal attorney Mark Pomerantz said his client has talked with the government about "securities trading conduct by other people" but stressed that he did not mean to imply Waksal had spoken about Stewart.

Prosecutors said the new conspiracy case arose from their investigation into ImClone, the biotechnology company formerly headed by Waksal.

Waksal entered the plea before U.S. District Judge William H. Pauley, who asked him, "Did you understand, sir, that what you were doing was wrong and illegal?"

"Yes, I did, sir," Waksal answered in a soft tone, his hands clasped behind his black pinstriped suit.

Waksal said he bought the paintings, including works by Mark Rothko and Roy Lichtenstein, from a New York City gallery for $15 million, had the art shipped to his Manhattan apartment but arranged for the invoice to be sent to an ImClone office in New Jersey.

He said he paid for the paintings with wire transfers from his bank account to the gallery owner.

Waksal pleaded guilty in October in a federal investigation into trading of ImClone. He admitted to tipping his daughter to dump the company's stock just before it plunged after bad news from the Food and Drug Administration.

His plea covered securities fraud, bank fraud, conspiracy to obstruct justice and perjury.

Stewart, the home-decorating maven, sold nearly 4,000 ImClone shares on Dec. 27, 2001, the day before the FDA declined to review the drug Erbitux. She has maintained she had a standing order to sell the stock if it dropped below $60.

After the plea, Waksal rushed out of the courthouse past cameras and into a waiting sport utility vehicle.

He issued a statement that said: "Only two things are important to me at this point - my family and getting our cancer drug approved. Beyond that I simply look forward to the day when I can put all of this behind me and move on with my life."




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