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June 30th, 2016
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NY Energy Investor Pleads Guilty to $45M Tax Evasion

NY Energy Investor Pleads Guilty to $45M Tax Evasion

In yet another case of serious business corruption in the Big Apple, a leading energy investor based in New York submitted a guilty plea Monday to charges that he perpetrated a long-running scheme that enabled him to avoid paying more than $45 million in income and other taxes partially accrued from his sale of an oil company.

Morris Zukerman, who was previously a banker at Morgan Stanley and is currently chairman of his own investment firm M.E. Zukerman & Co, pleaded guilty in Manhattan federal court to one count of tax evasion and one count of obstructing the Internal Revenue Service. Only one month before, the 72-year-old Zukerman was indicted after the conclusion of a two-year grand jury investigation. Through a plea deal that his attorney worked out with the court, Zukerman agreed that he would not appeal any prison sentence of 7-1/4 years or less. The investor’s sentencing is set for Dec. 5.

“After years of finding every way to avoid his tax obligations, Zukerman has finally been forced to admit to his criminal tax evasion,” stated Manhattan U.S. Attorney Preet Bharara, who has been relentless – and quite successful – in his quest to seek out and uproot corruption in New York’s governmental and business sectors.

From 1972 to 1988, Zukerman was employed by Morgan Stanley, where he served as joint head of the investment bank’s energy group. He then moved on to establish M.E. Zukerman & Co., which centered its investments around energy, natural resources and agriculture companies.

According to the government prosecutors, Zukerman plotted to get out of paying taxes on income that he earned from a 2008 sale of an oil company he co-owned through a subsidiary of M.E. Zukerman with a publicly traded company that netted his company $130 million.

While court papers did not identify that company, in the same time frame Zukerman’s company sold a Texas-based firm called Penreco that was it had jointly owned with ConocoPhillips.

In the aftermath of the sale, Zukerman transferred the proceeds to a trust and a number of corporations, including one from which he directed that the sum of $50 million be used to purchase paintings by European artists from the 15th to 19th centuries, prosecutors charged.

The deceitful investor further claimed $1 million in fraudulent charitable contribution deductions in connection with the acquisition of property on Black Island off Maine’s coast, prosecutors disclosed.

Isaac Jemal

 

Bratton Slammed by City Council for “Broken Windows” Report Dismissal

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Prosecutors in Pollard Case Drop Unusual Request

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Jonathan Pollard has won a sma...

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