NEW YORK ImClone founder gets 7-year sentence, $4.3M fine

A prosecutor says the sentence shows corporate crooks will serve real jail time.
NEW YORK (AP) -- ImClone Systems founder Sam Waksal is due to report to federal prison in three weeks to begin serving a sentence of more than seven years in the stock-trading scandal that has ensnared his friend Martha Stewart.
A federal judge handed down the sentence Tuesday, also ordering Waksal to pay nearly $4.3 million in fines and back taxes and scolding him for "lawlessness and arrogance."
Waksal admitted last fall to tipping his daughter, Aliza, to dump ImClone stock in December 2001 because he had received word the government was about to issue a negative report on the ImClone cancer drug Erbitux.
He has also admitted he tried to transfer some of his own ImClone shares into his daughter's account so they could be sold. Brokerage Merrill Lynch blocked the transfer.
Stewart, a longtime friend of Waksal, is accused by federal prosecutors of unloading her ImClone stock when she heard the Waksals were selling. The home-decorating maven has pleaded innocent to a five-count indictment.
Scolding
At a sentencing hearing in Manhattan federal court, U.S. District Judge William H. Pauley said Waksal had damaged his company, his family and investors nationwide.
"The harm that you wrought is truly incalculable," the judge said.
The prison sentence of seven years and three months was at the high end of the range suggested by federal guidelines for Waksal's crimes. The payments include a $3 million fine and more than $1.2 million Waksal owes for evading sales tax on nine paintings.
James Comey, the top federal prosecutor in Manhattan, said he was satisfied with the verdict because it "shows that corporate crooks will serve real jail time."
In a letter to the judge to plead for leniency, Waksal admitted encouraging his daughter to lie to investigators and said his crimes "tore my family apart."
"That punishment is with me every moment of the day," he said. "I dream about it. I can barely look at Aliza without questioning who I am. When she cried to me and asked me why she was involved in this situation, I died inside."
Aliza Waksal has not been charged with a crime, and some analysts speculated Sam Waksal's guilty plea was partly designed to save his daughter from prosecution.
Apology
Waksal also addressed the judge in court, apologizing to his family and shareholders -- even to cancer patients in case the government's evaluation of Erbitux had been delayed by the uproar over the insider-trading scandal.
Last week, a new study conducted in Europe found Erbitux does appear to be effective, helping some of the sickest colon cancer patients live longer.
The judge, granting a request by Waksal's defense, said he would recommend that Waksal serve his time at the federal prison at Eglin Air Force Base in Florida.