Millionaire Sentenced to 1 1/2 Years for Tax Fraud; Had Come Under Fire for Violin Sale

AP ^ | 3-22-05 | Bonnie Pfister

[Indy Pendance]

TRENTON, N.J. (AP) - A millionaire who came under fire for taking a big tax writeoff after selling rare musical instruments was sentenced to 1 1/2 years in prison Monday as part of a plea deal in an unrelated tax case.

Herbert Axelrod also must pay a $40,000 fine for helping a former employee file a fraudulent federal tax return, a charge to which he pleaded guilty in December. As part of his plea agreement, Axelrod also must file a new 2003 tax return, taking no deduction for the sale of 30 stringed instruments to the New Jersey Symphony Orchestra.

Prosecutors had asked for the 18-month sentence, while Axelrod's lawyer argued the former tycoon-turned-fugitive be imprisoned for a year.

Axelrod, 77, made a fortune selling products such as the popular Nylabone line of dog toys and running TFH Publications, which specializes in books on animals and pets.

In 2003, he sold a collection of rare stringed instruments to the New Jersey Symphony for $17 million. At the time, he said the violins, violas and cellos - some crafted by the renowned 17th century violin maker Antonio Stradivari - were worth $49 million. But since then, several experts have questioned the valuation and said some of them were not genuine.

In December, a three-member orchestra panel said the instruments should be valued at the purchase price, not $49 million.

Last April, Axelrod was accused of depositing $775,000 for a former employee into Swiss bank accounts to hide the money from the government. Axelrod, who was out of the country when the indictment came down, traveled to Cuba and then Europe before he was arrested in June in Berlin.

Axelrod said Monday that not returning to the United States for his April indictment was the "biggest mistake of my life."

"It was always my goal to be remembered as an outstanding philanthropist. Now, that's all gone. Instead, I will be remembered as a man who disrespected his country, his government and this court," Axelrod said.

The employee, Gary Hersch, pleaded guilty to conspiracy last month and faces up to five years in prison.

[Indy Pendance]

"At the time, he said the violins, violas and cellos - some crafted by the renowned 17th century violin maker Antonio Stradivari - were worth $49 million. But since then, several experts have questioned the valuation and said some of them were not genuine."

Biggest scam in the music industry.

[Imaverygooddriver]

And they all get left in NYC taxis.

[L98Fiero]

This VERY melly, eccentric man who used to ride around my old college campus collecting cans on his 10-speed claimed to have owned one. Food for thought. ;)

[L98Fiero]

"melly" is really supposed to be "smelly" but it sounds like "melly" when one is holding his nose.