CRANBERRY ISLES — Federal tax evasion charges against Morris Zukerman, a summer resident of Islesford, include an allegation that he bought property on Black Island in the town of Frenchboro for $1 million and then claimed the expense as a charitable donation on his tax return.
Bloomberg News reported last week that the grand jury indictment was filed May 11 in U.S. District Court in Manhattan against Zukerman, 71, for allegedly failing to pay more than $45 million in income and sales taxes.
According to Bloomberg, the indictment alleges that Zukerman “failed to report profits from the sale of an oil company, lied to his accountants, created phony and backdated documents and shipped paintings to addresses in Delaware and New Jersey to avoid New York sales taxes on artwork that hangs in his Park Avenue duplex.”
The indictment also claims that Zukerman discussed donating money to “a local conservation group” so that it could buy 250 acres on Black Island, but instead bought the property for himself. He then allegedly claimed the $1 million purchase price as a charitable deduction on his 2010 tax return. The conservation group is not identified in the indictment, but officials of Maine Coast Heritage Trust (MCHT) confirmed Monday that it is the organization in question.
MCHT bought 360 acres of land on Black island for $2.05 million in 2010. That same year, MCHT sold 240 acres of that land to Redentore LLC, a corporation established by Zukerman, for $1 million.
The sale was subject to “a conservation easement guaranteeing public access and limiting development to a one-acre building area,” according to Bob DeForrest, an MCHT land protection project manager. “The remaining 120 acres have been retained as a public preserve.”
As for the allegations of tax evasion against Zukerman, MCHT’s director of communications Richard Knox told the Islander, “We were contacted by the U.S. Attorney’s office for the Southern District of New York during their investigation of Mr. Zukerman and provided requested information. We were not a target of the investigation.”
Now that Zukerman has been indicted, “MCHT will continue to cooperate with the attorney general’s office,” Knox said.
Zukerman is chairman of M.E. Zukerman & Co., an asset management and investment firm in New York. He is charged with three felony counts including tax evasion, attempting to impede administration of federal tax laws and wire fraud. He remains free on bail, his $2.5 million bond secured by works in his art collection, according to Bloomberg.com.
Zukerman and his wife, Karen, are trustees of the Zukerman Family Residential Trust, which owns a home on an 11.1-acre lot with ocean frontage on Islesford, according to town of Cranberry Isles tax records. The property at 39 Mosswood Road is assessed for tax purposes at $2.48 million.
Prior to 1995, when ownership of the property was transferred to the trust, it was owned by Zukerman personally.
The Zukerman Trust also owns an undeveloped 5.8-acre lot on Islesford assessed at $63,100.