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Posted: 6/10/2003 10:10:47 AM EDT
ImClone Founder Sam Waksal Given 7 Years By ERIN McCLAM, Associated Press Writer NEW YORK - ImClone Systems founder Sam Waksal was sentenced to seven years and three months in prison Tuesday for an insider-trading scandal that ensnared his family and threatens Martha Stewart (news - web sites) and her home decorating empire. He also was ordered to pay more than $4 million in fines and back taxes. U.S. District Judge William H. Pauley rejected Waksal's plea for a lighter sentence based on ImClone's cancer research, Waksal's humanitarian works and the intense media interest surrounding the case. "The harm that you wrought is truly incalculable," the judge said. Earlier, with his voice breaking, Waksal, 55, apologized to his family and former employees just before he was sentenced. "I am deeply disturbed and so very sorry for my actions," he said. "I want to apologize to all the people who may have had confidence in me and whose confidence I betrayed." Waksal, who once rubbed shoulders with rock stars and cut a flamboyant figure in the mostly staid pharmaceutical industry, pleaded guilty in October to six counts, including securities fraud, bank fraud, conspiracy to obstruct justice and perjury. The charges cover insider trading and the evasion of $1.2 million in sales taxes on fine art. Assistant U.S. Attorney Michael Schachter asked for more than seven years, saying Waksal "told numerous, separate and distinct sets of lies" surrounding his family's sale of ImClone stock. Waksal admitted to a scheme in which he tipped his daughter, Aliza, to dump ImClone stock just before it plunged in value on news that the Food and Drug Administration (news - web sites) would not review his company's experimental cancer drug, Erbitux. Stewart, a close friend of Waksal, was indicted last week on five federal counts — including obstruction of justice, conspiracy and lying to investigators — tied to her December 2001 sale of nearly 4,000 shares of ImClone stock. She pleaded innocent. Her former stockbroker, Peter Bacanovic, also was indicted and pleaded innocent. Prosecutors said Bacanovic illegally sent word to Stewart that Waksal's family was planning to unload shares of ImClone. In a packed courtroom and with dozens of cameras ringed around the Manhattan courthouse, Waksal lawyer Mark Pomerantz tried to distance his client from the scandals that had shaken confidence in corporate America. "He has been worried that he's going to be held responsible for companies and situations that he had nothing to do with," Pomerantz said. But Schachter said Waksal had violated "a sacred trust with his shareholders" and blamed him for doing national harsm with a crime made worse by his position as chief executive officer. "It runs the risk of sending the message to investors that the game is rigged," he said. A week ago, ImClone stock surged after European researchers reported that Erbitux does appear to be effective, helping some of the sickest colon cancer patients live longer. Waksal told the judge, "To cancer patients I am so sorry for any delay I might have effected in the approval of Erbitux because of my actions." Pomerantz portrayed Waksal as fiercely devoted to ImClone and said he covered up the insider trading because he did not want to have to leave the company. The lawyer said the insider trading "took place literally on the spur of the moment." "This was not a sophisticated, highly planned course of conduct that extends over time," he said. Waksal, in a letter to the court, said: "I tore my family apart. That punishment is with me every moment of the day. I dream about it." The charges against him were not all directly related to insider trading. In pleading guilty to bank fraud, Waksal said he forged a lawyer's signature on paperwork for a $44 million bank loan. On the obstruction count, Waksal admitted he ordered staff to keep certain financial records from leaving his office, knowing the Securities and Exchange Commission (news - web sites) would be interested in them. Prosecutors say Waksal also ordered the destruction of computer files, phone messages and other records, though he did not admit to those allegations. He pleaded guilty to conspiring with an art dealer to dodge $1.2 million in sales tax on nine paintings that cost him a total of $15 million. In March, Waksal agreed to an $800,000 fine and a lifetime ban on leading a public company in a partial settlement of civil charges relating to the scandal filed by the Securities and Exchange Commission.
Link Posted: 6/10/2003 10:14:37 AM EDT
ok, so i follow the many charges and agree with them all, [b]EXCEPT[/b] the tax evasion one. read the link to the case [url]http://news.findlaw.com/hdocs/docs/imclone/uswaksal30303sinf.pdf[/url] and tell me what you think... sounds like he was just being smart like most of us are and buying stuff out fo state to avoid getting raped by the state of New York for their part in doing absofuckingloutely nothing. how many of us have done the same thing with lesser items thinking that we were commiting "Conspiracy to commit Tax Fraud." sounds like a B.S. charge to milk this admitted bastard out of another cool mil.
Link Posted: 6/10/2003 10:14:57 AM EDT
Originally Posted By colinjay: "I am deeply disturbed and so very sorry for my actions," he said. "I want to apologize to all the people who may have had confidence in me and whose confidence I betrayed."
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Sorry, buddy. Do the crime, do the time. See ya in seven...
Link Posted: 6/10/2003 10:20:27 AM EDT
and BTW it is some damn good art and the purchase itself no doubt helped inflate the price of the art in NY collections. greedy govt. fucks.
Link Posted: 6/10/2003 10:50:48 AM EDT
7 years??? that's it? Wonder what Ken Lay might get?
Link Posted: 6/10/2003 10:51:33 AM EDT
[Last Edit: 6/10/2003 10:55:10 AM EDT by Magnus357]
[b]OK SERIOUSLY WTF!?![/b] I understand that insider trading can possibly effect the stability of the market; however, I really do believe that theory remains untested. Why such SERIOUS fines and punishment? I mean come on! MILLIONS of dollars in back "taxes" that he really only got convicted of on "conspiracy charages." Does that seem right to you? Better yet, he's also going to be spending seven years of his life in Club Fed for letting his daughter know to dump stock in [b]his[/b] cancer research company so that she would not be finacially hurt. Does that make him more than a criminal than an armed robber that WOULD get less time? Was any of his "insider trading" proven to hurt anyone? I mean look what the Enron heads did and where they are now. I guess those guys had more friends in high places than this poor dude. Lastly, the only reason his company was going to take the hit was because some alphebet agency shot down his idea. I am sure this was after MANY years. If we want inovation in the medical market, we need less restrictions on it. This whole thing stinks to me. . . - Matt
Link Posted: 6/10/2003 10:58:44 AM EDT
While he is obviously a prick, it seems to me there are far bigger fish in the sea. I just don't understand the Feds.
Link Posted: 6/10/2003 11:51:05 AM EDT
good points magnus.
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