
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, May 25, 1990                   TAG: 9005250321
SECTION: BUSINESS                    PAGE: A9   EDITION: METRO 
SOURCE: The New York Times
DATELINE: NEW YORK                                LENGTH: Medium

BOESKY DISCLOSES DEDUCTIONS

Ivan Boesky testified Thursday that he had deducted from his taxes half of the $100 million he paid to settle insider trading charges, kept millions in ill-gotten gains and illegally bribed fellow prisoners to do his laundry.

The disclosures by Boesky, who has been the government's central witness in the scandals on Wall Street, came during a harsh cross-examination in the third day of his first public testimony since his fall in 1986.

Boesky, whose three-year prison sentence for securities fraud ended last month, has been testifying in the securities fraud trial of John Mulheren, a Roanoke College graduate and benefactor, and the former head of Jamie Securities. Boesky implicated Mulheren, a longtime friend, as part of his agreement to cooperate with the government.

Boesky has been sparring in the cross-examination with Thomas Puccio, Mulheren's lawyer. The two men frequently have clashed as Puccio has forced Boesky to discuss the many times he lied and broke the law.

When questioned on details, including testimony he has provided during the last few days, Boesky has repeatedly maintained that he could not remember.

Dozens of questions have been answered with a quick "I would have to be refreshed," indicating that Boesky would not reply until he saw documentation about the issue.

But Thursday's testimony was perhaps the most jolting, as Puccio forced Boesky to provide details of his agreement with the government that have never before been disclosed.

The disclosure of the $50 million tax deduction and his retention of money he earned from illegal insider trading raised questions Thursday in the minds of some officials about the severity of Boesky's punishment for the wide-ranging crimes he committed, as well as the terms of the agreement he reached with the Securities and Exchange Commission and the U.S. attorney in Manhattan.

"We are going to be asking the SEC some rather pointed questions about that," Rep. John Dingell said when asked about the disclosure of the financial impact of the settlement on Boesky. Dingell is chairman of the House Energy and Commerce Committee, which oversees the SEC.

One of Boesky's lawyers, Charles Davidow, disclosed the deduction in a back-room meeting with federal District Judge Miriam Cedarbaum, who is hearing the criminal securities fraud case against Mulheren.

Davidow said he could not say whether the deduction, which was said to have been taken as a capital expenditure on Boesky's personal income taxes, was legal. "I'm not a tax lawyer," he said.

by CNB