Oil Investor Zukerman Pleads Guilty in Tax Evasion Case

(Bloomberg) - Oil-industry investor Morris Zukerman admitted to evading tens of millions of dollars in taxes, pleading guilty to federal charges that could send him to prison for more than seven years.

Zukerman, 72, pleaded guilty to two criminal counts just a month after prosecutors accused him of wide-ranging, multiyear scheme. He admitted to failing to report $28 million in profits from the sale of an oil company and repeatedly lying to his accountants -- including instructing them to claim deductions for expenses that were not deductible. He said he permitted backdated documents to be provided to one tax preparer too.

“These statements to the court mark the start of the difficult and painful process of accepting responsibility for and redressing what I recognize as serious criminal wrongdoing,” Zukerman tearfully told a judge in Manhattan federal court. He said his guilty plea “gives me an opportunity to repair some of the damage my actions have caused my family, my government, and the many friends, colleagues, and business associates. They had a right to expect much more from me, and I, far more of myself.”

Zukerman spent 16 years at Morgan Stanley, at one point overseeing its energy practice. He started his own investment firm in the late 1980s, M. E. Zukerman & Co., and his firm’s partners have included ConocoPhillips, Exxon Mobil Corp. and Kinder Morgan Inc. He endowed a Harvard sociology professorship and collected dozens of expensive paintings, including works loaned to the Metropolitan Museum of Art.

The indictment alleged that Zukerman shipped paintings to addresses in Delaware and New Jersey to evade New York state sales tax on artwork that immediately went to his Park Avenue duplex in Manhattan. He did not plead guilty to that charge but instead will pay restitution to New York of $4.6 million.

He will be sentenced at a hearing scheduled for Dec. 5. He pleaded guilty to one count of tax evasion and another count of impeding the Internal Revenue Service.

The case is U.S. v. Zukerman, 16-cr-00194, U.S. District Court, Southern District of New York (Manhattan).

- With assistance from Patricia Hurtado. To contact the reporters on this story: Jesse Drucker in New York at jdrucker4@bloomberg.net ;Katherine Greifeld in New York at kgreifeld@bloomberg.net To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net Andrew Martin

Copyright 2016 Bloomberg News.

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