DISTRICT ATTORNEY - NEW YORK COUNTY

News Release
July 2, 2003

Contact: Sherry Hunter
212.335.9400

Manhattan District Attorney Robert M. Morgenthau announced today that a prominent art gallery has pleaded guilty to evading more than $200,000 in New York City and State taxes on sales of over $2,400,000 in 16th, 17th and 18th century paintings and drawings. The defendant is BOB P. HABOLDT AND COMPANY, INC.

The company pleaded guilty today before Acting New York State Supreme Court Justice John Cataldo to two felony counts of violating New York State's Sales and Compensating Use Tax Law. As a result of the plea, the company has paid $400,000 in fines under Tax Law. Customers of the gallery have remitted or are in the process of remitting the sales tax that was not collected from them by the company.

The investigation leading to BOB P. HABOLDT AND COMPANY, INC's plea revealed that the company failed to collect sales tax on sales of more than eleven art works between March 1, 1998 to November 30, 2002. The company which specializes in Dutch and Flemish masters, sold works to residents of New York and on occasion, in order to evade collecting and remitting sales tax, shipped containers out of state that purported to, but did not contain the items purchased or created documents which said that the shipping had taken place when it had not.

Mr. Morgenthau said that there is a continuing investigation into other galleries and customers who may have avoided paying appropriate sales taxes. Mr. Morgenthau noted that this case is the latest in a series of tax prosecutions that have yielded more than $10.8 million in unpaid taxes and fines to the City and State.
Mr. Morgenthau thanked the New York State Department of Taxation and Finance: Commissioner Arthur Roth, Deputy Commissioner for Tax Enforcement Peter Farrell, and Joseph Brooking, Esq. Mr. Morgenthau also thanked the New York City Department of Finance: Martha E. Stark, Commissioner and Bruce Kato, Esq., Assistant Commissioner, Office of Tax Enforcement.
Assistant District Attorney Richard Preiss is in charge of the case. Chief Analyst of Investigation Division Central Peggy Abensur also assisted in the case. Assistant District Attorney Clark Abrams, Senior Rackets Investigator Stephanie Scott and paralegal Anne-Lise Quach participated in the investigation which was supervised by Assistant District Attorney John W. Moscow, Deputy Chief of the Investigation Division.

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Defendant Information

Bob P. Haboldt and Company, Inc.
22 E 80th St, Third Floor
New York, New York