Wealthy Americans are accustomed to tailoring their taxes to fit their incomes while keeping them comfortably within the law: a snip here, a tuck there, and the skimpier the result the better. But fashion magnate Albert Nipon, whose clients have included such American leading ladies as Nancy Reagan, Rosalynn Carter, Barbara Walters and Mary Tyler Moore, has learned that dressing up tax returns with blatantly fraudulent deductions doesn’t pay. Citing “an attitude in this country among many successful people that the federal income tax laws are somewhat of a game, and the winner pays little or no taxes,” Senior U.S. District Judge Raymond J. Broderick recently sentenced Nipon to three years in prison for tax evasion. He also ordered the couturier to pay a sum that may exceed $3 million in back taxes, penalties and fines. Chastened, the 57-year-old Nipon issued a statement acknowledging “a terrible mistake. I deeply regret all that has happened and I accept the consequences.”
The Philadelphia U.S. Attorney has billed the Nipon affair as “one of the largest bribery schemes ever uncovered.” It charges that in 1979 and 1980, Nipon wrote off more than $800,000 in improvements on his 6.8-acre estate, Wooden Hill, in an upper class Philadelphia suburb, against his $60-million-a-year fashion business. When tax examiner Meyer Weiss and retired IRS agent Edmond Constantini caught on to the scheme, they took $200,000 in bribes from Nipon to reduce his personal liability from $508,063 to $19,834. The agents paid heavily for their greed: Constantini was fined $100,000 and sentenced to four years in prison, and Weiss awaits sentencing. Nipon’s accountant, Leonard Bezark, who pleaded guilty to falsifying his boss’ tax returns and bribing a third undercover IRS agent, was sentenced to 18 months and fined $20,000.
With good behavior, Nipon may serve only a year of his sentence, probably at Allenwood Federal Prison Camp. Nipon predicted the business would continue to flourish in his absence. Nipon’s wife of 33 years, Pearl, who started the fashion business with him in 1954, handles the design end while all three of their sons, Lawrence, 30, Leon, 27, and Andrew, 25, also hold company positions. (Daughter Barbara Joy, 23, is finishing college.) Before sentencing the shaken fashion king, Judge Broderick praised him generously for his many contributions to charity, then offered the only comfort he could: “You’ll be able to survive and become an even greater man than when you go in.”