Zukerman ordered to ‘cushy’ lockup

CRANBERRY ISLES — New York investment company owner Morris Zukerman won’t be spending time at his home on Islesford this summer.

Instead, he will be doing time at the Federal Correctional Institution at Otisville, N.Y., a medium-security facility that has been described as one of the “cushiest” federal prisons in the country.

Zukerman, 73, reported to the prison June 26 to begin serving a 70-month sentence for engaging in what the U.S. Attorney’s Office for the Southern District of New York described as “multi-year tax fraud schemes.” He was charged with evading more than $45 million in income and sales taxes.

Zukerman pled guilty to the charges in June 2016 and was sentenced in March of this year.

There are 102 federal prisons across the country. The one at Otisville is about 70 miles northwest of New York City, where Zukerman has his principal residence. Over the past decade, several news organizations have rated the prison as one of the nicest places in America to be incarcerated.

In 2009, Forbes magazine had it at number 10 on its list of “America’s 10 Cushiest Prisons.”

In 2012, CNBC placed Otisville at number six on its list of the “12 Best Federal Prisons To Do Time.”

Later that year, the Times Herald-Record newspaper of Middletown, N.Y., published a story in which it said the prison had been described “a castle behind bars.” The story quoted former inmate John Altman as saying, “You could do about anything you wanted there. It’s not just good, it’s sweet.”

In addition to sending Zukerman to prison, U.S. District Judge Analisa Torres ordered him to pay more than $37 million in restitution to the Internal Revenue Service and the state of New York. She also imposed a $10 million fine.

Zukerman appealed to a federal court in New York to allow him to pay the fine in installments. In May, Judge Torres agreed to stay her lump-sum-payment order pending the outcome of Zukerman’s appeal, but she ordered him to begin paying monthly installments of $250,000 in June.

Among the numerous charges against Zukerman was that he fraudulently claimed a $1 million tax deduction in connection with his purchase of 240 acres on Black Island in the town of Frenchboro in Maine. He falsely claimed the purchase price as a contribution to Maine Coast Heritage Trust.

Zukerman is the founder of M.E. Zukerman & Co., which has specialized in energy sector investments. He previously led Morgan Stanley’s energy group.

Zukerman and his wife, Karen, own a home on an 11.1-acre oceanfront lot on Islesford. The property is assessed for tax purposes at $2.48 million.

Dick Broom

Dick Broom

Reporter at Mount Desert Islander
Dick Broom covers the towns of Mount Desert and Southwest Harbor, Mount Desert Island High School and the school system board and superintendent's office. He enjoys hiking with his golden retriever and finding new places for her to swim. [email protected]

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