Adviser Pleads Guilty to Theft and Evading Taxes
An adviser to some of the most prominent takeover specialists of the 1980s pleaded guilty Tuesday to stealing $1 million from clients and evading and falsifying state income taxes.
Donald C. Carter, 41, chairman and founder of the Carter Organization Inc., waived indictment and pleaded guilty in state Supreme Court in Manhattan to grand larceny and filing a false and fraudulent personal income tax return.
Among those Carter worked for as a proxy solicitor were T. Boone Pickens Jr., Saul P. Steinberg, Irwin A. Jacobs and Sir James Goldsmith.
The firm, which had suspended Carter from his duties on Monday, announced later Tuesday that it had fired Carter. In a news release, the firm said that until Carter’s statement published in Monday’s Wall Street Journal that he intended to plead guilty to the charges, “Mr. Carter denied that he stole from some of the clients of the Carter Organization.”
“The Carter Organization, as Mr. Carter’s former employer, said it is committee to cooperating with those clients to remedy any damage caused by Mr. Carter’s criminality,” the statement read. “The company is also committed to ensuring that this kind of conduct can never reoccur.”
The Carter Organization also stated it would take “appropriate action” if Carter was found to have defrauded the company.
James W. Wetzler, commissioner of the state Taxation and Finance Department, called Carter’s plea a “symbol of the greed that motivated so much of the ‘80s.” Officials made the announcement at a news conference here.
Ronald Goldstock, director of the New York State Organized Crime Task Force, which headed the Carter investigation, said business records seized at Carter’s Manhattan office and at a Brooklyn warehouse showed a “systematic pattern of greed and fraud.”
He said that between 1984 and 1989 Carter routinely billed his clients for non-existent or inflated expenses and when questioned about the expenses, he supplied fraudulent documentation to justify them.
The corporate clients he was said to have defrauded included Union Carbide Corp., Shell Oil, Caesars World Inc. and MacAndrews & Forbes Group Inc., which owns the Revlon cosmetics company.
Carter had faced up to 11 years in prison, but Justice George F. Roberts promised him a prison term of 16 months to 4 years and a fine of up to $2 million when he is sentenced May 2.
