Rose Pleads Guilty to Two Tax Charges : Felony: Former Reds’ star, manager can get up to six years in prison, but opinions vary as to whether he will serve time.
Pete Rose was freed on his own recognizance Friday after a federal judge in Cincinnati accepted his guilty pleas to two felony charges of filing false tax returns.
The former Cincinnati Red star and manager, whose gambling activity resulted in a lifetime baseball ban last year, admitted in an agreement reached with federal prosecutors that he failed to report $354,968 in income from memorabilia sales, autograph signings and personal appearances during a four-year period beginning in 1984.
The two counts each carry a maximum three-year jail term and $250,000 fine.
As part of the plea arrangement, the government agreed not to prosecute Rose for the more serious charge of tax evasion, but there was no restriction on sentencing.
Accompanied by two attorneys, Rose had no comment after the 30-minute hearing before U.S. District Judge S. Arthur Spiegel.
Sentencing was postponed pending the filing of pre-sentencing reports, which could take four to six weeks.
Later, in a prepared statement, Rose said he was not a bad person but had done bad things for which he will always be sorry.
He said the gambling addiction, for which he is receiving treatment, led to all of his problems and that he hopes the public will accept his attempt to recognize and deal with those problems.
“I’m very lucky that I’m still financially well off, because my advisers made it embarrassing for me to get at all of my savings to use for gambling,” Rose said in his statement.
Rose is eligible to file for baseball reinstatement in August but has not said whether he will. A spokesman said Commissioner Fay Vincent would have no comment on the Rose tax developments.
Rose stood before Spiegel in the crowded courtroom, his hands folded in front of him, and clearly answered, “Yes, sir,” to questions Spiegel asked before accepting the plea.
During his weekly talk show on a Cincinnati radio station Thursday night, Rose addressed the possibility of a jail term and said he wasn’t concerned.
“All you can say is it’s up to the judge,” he said. “I know I’m not a bad person, but I did make some mistakes, and it’s in the eyes of the judge.”
Spiegel is the same judge who presided over the tax-evasion trial of Rose’s former friend and housemate, Tommy Gioiosa, last summer. Gioiosa is serving a five-year term for transporting cocaine and conspiracy to defraud the Internal Revenue Service by claiming Rose’s winnings on his own tax reports.
U.S. Attorney D. Michael Crites declined to say at a news conference after Friday’s hearing whether he would seek a jail term for Rose.
“A great deal of latitude is given to the federal judge under the sentencing guidelines,” he said.
Legal experts expressed varying opinions over whether Rose will have to serve any prison time.
“It’s a total wild card; you never know what the outcome is going to be,” former Abscam prosecutor Thomas Puccio told the Associated Press. “There is no usual thing. The tendency has been to treat each one of these cases on its own facts. If you commit a bank robbery, you go to jail. With tax charges, it’s not so clear.”
Under federal guidelines that went into effect on Nov. 1, 1987, judges must look at a specific grid to determine the sentence. One of Rose’s offenses was committed before the guidelines were enacted and one afterward.
“The situation prior to the guidelines was that the majority of criminal tax offenders went on probation,” University of Chicago law professor Albert Alschuler said. “The guidelines made the determination that almost all of them would go to prison.”
A U.S. Sentencing Commission study showed 57% of criminal tax-law convicts in 1985 got only probation. The figure would have been 3% under the guidelines.
Rose’s 1987 charge appears to fall on the border between a prison sentence and probation. A convict’s position on the grid depends on how the judge factors in his acceptance of responsibility, his level of involvement in the crime and the amount of money involved. Judges may depart from the grid in sentencing but must state their reasons.
Steven Duke, a law professor at Yale, says Rose probably will serve time.
“It is the position of the Justice Department that tax evaders should go to jail,” Duke said. “It would be rather hard for a judge to say that an exception should be made here. But it wouldn’t be outrageous for him not to go to jail. Maybe weekends or something like that.”
Asst. U.S. Attorney William Hunt told the judge that a year-long federal investigation found no evidence that Rose was involved in the drug activities of his former colleagues. However, Hunt said evidence showed that Rose was “a chronic gambler” who hid large amounts of income from his financial advisers.
For example, Hunt said, Rose owned a share in 10 Pik Six race track payoffs and sold the baseball bat he used for his 4,192nd hit--which made him the all-time leader in hits--for $129,000.
Hunt said Rose has paid the IRS $366,042.86 in back taxes, interest and penalties.
As part of his plea agreement, Rose admits he under-reported his income in 1984-87. He reported a total of $4.6 million in income for those years, paid $2 million in taxes, but hid $354,968 in income from personal appearances, autograph signings and memorabilia sales.
The first felony count says Rose claimed a gross income of $33,500 in 1985 from baseball card shows, autograph signings, personal appearances and memorabilia sales and no gross income from gambling, when, in fact, he made $95,168 from the card shows, memorabilia sales and appearances, plus $11,309 from gambling.
The second count says Rose reported $18,000 in gross income for 1987 from the same sources, when he actually made $171,553 from the card shows and appearances and $13,823 from gambling.