Tax fraud with strings attached

A New Jersey millionaire who came under fire for taking a big tax writeoff after selling rare musical instruments was sentenced to 1 1/2 years in prison Monday as part of a plea deal in an unrelated tax case.

Herbert Axelrod also must pay a $40,000 fine for helping a former employee file a fraudulent federal tax return, a charge to which he pleaded guilty in December. As part of his plea agreement, Axelrod must file a new 2003 tax return, taking no deduction for the sale of 30 stringed instruments to the New Jersey Symphony Orchestra.

Prosecutors had asked for the 18-month sentence, while Axelrod’s lawyer asked that the former tycoon-turned-fugitive be imprisoned for a year.

Axelrod, 77, made a fortune selling products such as the popular Nylabone line of dog toys and running TFH Publications, which specializes in books on animals and pets.

In 2003 he sold a collection of rare stringed instruments to the New Jersey Symphony for $17 million. At the time he said the violins, violas and cellos -- some crafted by the renowned 17th century violin maker Antonio Stradivari -- were worth $49 million. But since then, several experts have questioned the valuation and said some of them were not genuine.

In December, a three-member orchestra panel said the instruments should be valued at their purchase price, not $49 million.