August 31, 1987 12:00 PM

Nips and tucks in fabric made fashion mogul Albert Nipon rich and famous, but when he tried to tailor his taxes to suit himself, he ended up spending 20 months in prison. Although his time behind bars was devastating both personally and professionally, Nipon, 59, has worked nonstop since his release to nurse his financially ailing company back to health. In the less than two years that he was imprisoned, revenues at Albert Nipon Inc. fell by $15 million, ironically the best possible testimony to his skills as the company’s premier salesman.

Even with business falling off, his industry has been forgiving of Nipon’s tax problems (as it was earlier when designer Aldo Gucci and jeweler Nicola Bulgari pleaded guilty to tax evasion). “People make mistakes and they pay for them,” says William S. Ruben, president of Bonwit Teller. “Albert paid terribly for his. I’m sure no one was more embarrassed than he.”

Nipon says, “Since my return, everybody feels better about the business.” Consequently, retailers are ordering heavily from Nipon’s fall line, and sales of his $400 to $900 dresses are up 20 percent since spring. Nipon is especially encouraged that New York’s prestigious Bergdorf Goodman store is adding a Nipon boutique.

While Nipon was at Eglin Air Force base, a minimum security jail near Fort Walton Beach, Fla., Pearl, his wife of 35 years, sat in his vacant chief executive’s chair. Normally, she was chief designer at the company; her elegant dresses made the privately owned Nipon Inc. into a $60 million company that has been a leader in the better-dress market for the last 15 years (Nipon devotees include Nancy Reagan, Dina Merrill and Barbara Walters). But it was always Albert who expertly shmoozed the retailers and the customers. “Albert was really the master of selling goods,” says Bonwit’s Ruben.

Pearl and son Laurence, who is in charge of sales and marketing, were overwhelmed during Albert’s enforced absence. “I became a paper shuffler,” she admits. “I’d look at something and put it in one pile. I’d look at it again and put it in another pile. Someone once asked, ‘How in the hell do you get all this done?’ The fact of the matter is: I didn’t.”

Nipon was sentenced to three years in prison in May, 1985. Three months earlier, he had pleaded guilty to tax evasion and conspiracy, involving the payment of about $200,000 in bribes to two Internal Revenue Service agents so they’d overlook $800,000 in taxes he failed to pay on his 1978 return. (He has since deposited $1 million in an escrow account that is being used to pay his taxes and interest penalties.) Why did Nipon, a onetime accountant for Du Pont, do it? After all, he and Pearl and their four children lived the better-than-good life on a 6.8-acre estate in Gladwyne, a tony Main Line suburb of Philadelphia. “I made a terrible mistake,” was all Nipon would say in 1985. He isn’t all that much more forthcoming now. “We make our beds and have to lie in them,” he says. “The important thing is being able to get back up again.”

As for his time behind bars, Nipon says, “The biggest difficulty in prison was in adjusting your mind to make yourself feel useful and productive.” Normally a phonaholic, Albert was allowed only 15 minutes of phone calls—mostly to Pearl—a day. His prison jobs included sorting clothes and cutting grass. In his free time he studied Jewish history and religion. “It’s amazing how things written thousands of years ago can have such relevance today,” he says.

Pearl saw her husband virtually every weekend, bringing him photos of both family and business activities. “I didn’t want Albert to miss anything,” she says. When she was home, family and friends made sure she didn’t fret. “I never ate dinner alone. It was like all my friends had a pipeline—’Who’s taking care of Pearl tonight?’ ”

Nipon was released from prison last January, and in keeping with his early release parole guidelines spent the next four months living at a halfway house near Philadelphia and working part-time. “I was excited,” he says of his release, but his euphoria ended abruptly when he got word that his older brother, Edward, then 58, and a former vice-president of the company, and his wife, Sylvia, 67, had been murdered in Florida. (Their son-in-law and two accomplices would later be charged with the crime.)Two months after this personal tragedy, Albert suffered a business blow when a consortium of banks, nervous about the firm’s heavy fourth-quarter losses in 1986 (when Nipon was away), suddenly yanked the company’s credit. In a week, Nipon had reassured his bankers of the company’s sound standing and had secured a new line of credit. “I am perceived as the captain, and this was missing for a while,” he says.

That settled, Nipon is now firmly back in charge, putting in what he calls “5 to 9” shifts, and Pearl and he are planning to add children’s and men’s lines. He finds the long hours and demanding work a welcome change from the routine days and menial jobs in prison. “It has been an experience,” he says. “I wouldn’t wish it on anyone, but I think we came through it whole. I’m not bitter,” he adds. “I’m better.”

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