NEW YORK -- Jewelry store executives pleaded guilty Friday in a sales tax evasion scam that discounted purchases by Henry Kissinger, Frank Sinatra, Mary Tyler Moore, Donald Trump and other well-to-do shoppers.
Executives for the swank Bulgari jewelry store on Fifth Avenue admitted the store failed to pay sales taxes on $1.5 million worth of jewelry it sold. They must pay almost $2 million in fines and penalties, officials said.
Mayor Edward Koch said a fine was not enough and that those found guilty should be sent to jail.
'Fifteen days in jail for a prominent person is a prominent sentence,' Koch said after calling a news conference at City Hall to announce the guilty plea.
None of the customers, who included Adnan Khaghoggi, reportedly the richest man in the world, was charged because the law states that stores, not purchasers, are responsible for paying sales tax.
Nicola Bulgari, 45, of Manhattan, Richard Storm, 49, of Highland Beach, Fla., and Danaos, Ltd., the corporation that operates the posh gem store under a license from the Italian Bulgari Corp., entered the guilty plea in state Supreme Court in Manhattan.
Bulgari surrendered to the state attorney general's office Oct. 10 after he was tracked down by Interpol, the international police agency.
The Bulgari officials were indicted by a Manhattan grand jury in August on charges that they continually failed to collect sales tax on jewelry sold between December 1980 and March 1983.
Customers would pretend to have their jewelry mailed or delivered to addresses outside New York but would leave the store with their purchases, officials said. The store then would mail empty packages or inexpensive costume jewelry to the out-of-state addresses.
Justice Harold Rothwax ordered the corporation to pay $969,283 in unpaid taxes, $585,936 in interest and $366,646 in fines and penalties.
The city will get about half that amount, roughly $1 million, Finance Commissioner Abe Biderman said.
Attorney General Robert Abrams had asked for jail terms for Bulgari and Storm.
