No Prison Time Is Recommended in Sotheby's Price-Fixing Case

The New York Times ^ | 4/18/02 (for editions of 4/19/02) | Ralph Blumenthal and Carol Vogel

[GeneD]

The United States Probation Department has recommended no prison time for A. Alfred Taubman, the 78-year-old principal owner of Sotheby's who faces sentencing on Monday for his Dec. 5 conviction for fixing commission prices paid by auction clients.

But the Justice Department, which prosecuted Mr. Taubman, took strong issue, arguing to the sentencing judge, George B. Daniels of Federal District Court in Manhattan, that under federal guidelines Mr. Taubman deserved the maximum three-year term and a fine of at least $1.6 million to $8 million for leading a six-year antitrust conspiracy with Sotheby's rival, Christie's. The scheme, which rocked the auction world and by some estimates led to overcharges of hundreds of millions of dollars, cost sellers $43 million, the government contends.

The probation report was not made public, but prosecutors and defense lawyers cited it yesterday in clashing memorandums to the judge. Mr. Taubman's lawyers, from Davis Polk & Wardwell, gave the judge a compendium of 90 testimonial letters by luminaries, including former President Gerald R. Ford, Queen Noor al-Hussein of Jordan, former Canadian Prime Minister Brian Mulroney, former Secretary of State Henry A. Kissinger and Barbara Walters.

One lawyer indirectly involved in the case said that the probation report's nonbinding recommendation, which departs from the federal sentencing guidelines that call for a prison sentence, was striking and unexpected given the gravity of the charges. While the report is a major victory for Mr. Taubman, judges vary widely in how much weight they place on such recommendations, which follow extensive research and interviews with the subject.

Defense lawyers endorsed the report's recommendation of a "noncustodial sentence" and a fine.

In pre-sentencing arguments, the lawyers described Mr. Taubman as "an extraordinary citizen" and offered the court "a true rags-to-riches story, torn straight from the pages of a Horatio Alger novel."

But John J. Greene, the lead prosecutor, and other Justice Department lawyers, called the case "a garden-variety price-fixing conspiracy" and countered that "only a sentence imposing substantial imprisonment and a punitive fine will be sufficient to reflect the seriousness of the offense, promote respect for the law, provide just punishment and deter similar conduct." They said Mr. Taubman's "remarkably active lifestyle" belied his claim of infirmity and quoted approvingly another judge who said that the price-fixers "deserve to be punished for the same reason we punish common thieves."

Lawyers for Mr. Taubman, a shopping center developer whose wealth was put at more than $640 million, cited a medical expert who estimated that Mr. Taubman could be expected to live another 3.8 years, and argued that a prison term "would almost certainly be a life sentence."

According to one person who asked not to be identified and who wrote on Mr. Taubman's behalf, defense lawyers sent a list of guidelines to the letter writers, asking them to cite Mr. Taubman's generosity and good works but not to comment on the verdict no matter how strongly they felt.

Mr. Ford wrote that he met Mr. Taubman in the early 1960's when he built one of his first shopping malls in Grand Rapids, Mich., Mr. Ford's hometown. The event, he wrote, began a friendship that "expanded and deepened over the next 40 years."

In a telephone interview yesterday, Mr. Ford said: "I don't abandon friends even if they have unfortunate developments in their lives. I trust my friendships as deep, not shallow."

One of the more impassioned letters came from Mr. Taubman's wife of 20 years, Judy. "The thought that this extraordinary human being is now a defeated, humiliated shadow of himself breaks my heart," she wrote. "I still cannot believe it is actually happening."

Ms. Walters, the ABC television news anchor, had told her producers that she could not cover Mr. Taubman's case because the two were longtime friends, an ABC News vice president and spokesman, Jeffrey W. Schneider, said. Her letter was on personal, not ABC, stationery.

At Mr. Taubman's trial last year the jury was swayed by the testimony of a former Sotheby's chief executive, Diana D. Brooks, and evidence that Mr. Taubman and his counterpart at Christie's, Sir Anthony Tennant, conducted 12 secret meetings from 1993 to 1996. Another government witness, Christopher M. Davidge, former chief executive of Christie's, testified that those two chairmen conspired to fix prices, leaving tens of thousands of auction customers unable to barter with the two auction giants.

[GeneD]

To paraphrase F. Scott Fitzgerald, the rich are different from you and me; they avoid the hoosegow.

Especially if they're friends with Baba Wawa.

[mtman]

Mr. Taubman could be expected to live another 3.8 years, and argued that a prison term "would almost certainly be a life sentence."...He should have thought of that first!...Probabaly needed just a little bit more money!! ...Is he a Pali?

[razorback-bert]

Copmpassion to an offender who has grossly violated the laws is, in effect, a cruelty to the peaceable subject who has observed them.

Junius