Contact Us

PW Case Review Form
*    Denotes required field.

   * First Name 

   * Last Name 

   * Email 

Phone 

   * Please describe your case:

What injury have you suffered?

For verification purposes, please answer the below question:
+
=

No Yes, I agree to the Parker Waichman LLP disclaimers. Click here to review.

Yes, I would like to receive the Parker Waichman LLP monthly newsletter, InjuryAlert.

please do not fill out the field below.


Waksal Pleads Guilty To Six Charges

Oct 15, 2002 | AP

ImClone Systems founder Sam Waksal pleaded guilty Tuesday to bank fraud and conspiracy in an insider trading scandal that threatens Martha Stewart and her home decorating empire.

In an unusual move, prosecutors also said they are investigating a previously undisclosed sale of $30 million in ImClone stock by a Waksal associate that may result in new insider trading charges.

The admission from Waksal, 55, is the second guilty plea in the investigation. An assistant to Stewart's stockbroker pleaded guilty this month to a misdemeanor charge and agreed to testify against people charged in the case.

Waksal did not implicate Martha Stewart in his plea, and his plea was not part of an agreement to cooperate with prosecutors a rare development in a criminal plea.

Waksal pleaded guilty to six counts, including bank fraud, securities fraud, conspiracy to obstruct justice and perjury.

The former ImClone CEO was arrested in June on charges of trying to sell his shares and tipping off friends and family members who held millions of dollars in company stock. He allegedly passed on information that the Food and Drug Administration would not review his company's experimental cancer drug, Erbitux.

"I've made some terrible mistakes and I deeply regret what has happened," Waksal said outside court.

Waksal could face a total of 65 years in prison and millions of dollars in fines, although his sentence will likely be far less under federal sentencing guidelines.

Prosecutor Michael Schachter also revealed in Manhattan federal court that investigators were investigating whether Waksal may have also tipped off an unidentified associate who unloaded $30 million in ImClone stock based on Waksal's information.

Schachter told Pauley that phone records indicate a phone conversation between Waksal and the person just before the sale was made.

In outlining the accusations against Waksal, Schachter issued a stinging attack on the disgraced ex-CEO, charging he had used his daughter, Aliza, and his father as "human shields" to try to save himself from prosecution.

The bank fraud charge, which brings the most severe penalties, stemmed from Waksal's forging of the name of ImClone's top lawyer to a document securing a line of credit.

"Rather than have the ImClone general counsel sign the letter, I signed the letter," he told the judge.

ImClone prosecutors are also focusing their attention to Stewart and her Merrill Lynch stockbroker, Peter Bacanovic.

The Justice Department is investigating whether Stewart knowingly lied to lawmakers about her stock sale. Stewart sold nearly 4,000 ImClone shares on Dec. 27 one day before the FDA's announcement. She has maintained that she had a standing order to sell the shares if the stock dropped below $60.

At issue is whether Stewart acted on illegally obtained information in selling her stock. The home decorating entrepreneur and Bacanovic have denied wrongdoing and have not been charged.

Her spokeswoman Allyn Magrino did not return a telephone call seeking comment.

Douglas Faneuil, an assistant to Bacanovic, initially backed Stewart's account but later admitted he wasn't honest when first interviewed by investigators from the Securities and Exchange Commission and the FBI.

As part of his guilty plea entered, Faneuil agreed to testify against Stewart and others if they are charged. Faneuil pleaded guilty to a misdemeanor charge of accepting gifts to withhold information about Stewart's sale of her shares.

Waksal resigned in May, when the company learned that federal charges were going to be filed.

Waksal has been a flamboyant figure in the mostly staid pharmaceutical industry. Along with a doctorate in immunobiology, he has a $20 million art collection, including a Picasso, and a circle of friends that includes Revlon CEO Ron Perelman and rock star Mick Jagger.

Waksal is one of growing number of executives who have been accused of white-collar crimes this year. After the collapse of Enron Corp. last year, federal authorities have uncovered corporate scandals at multibillion-dollar companies including WorldCom, Tyco International and Adelphia Communications.


Related articles
Parker Waichman Accolades And Reviews Best Lawyers Find Us On Avvo