ImClone's Sam Waksal pleads guilty

By Thomas S. Mulligan
Los Angeles Times

NEW YORK — ImClone Systems Inc. founder Samuel D. Waksal pleaded guilty yesterday to insider trading, bank fraud and other crimes, but prosecutors said he still isn't cooperating in their widening probe of questionable stock transactions.

The government's prime target appears to be home-and-hearth tycoon Martha Stewart, a close Waksal friend whose own timely sale of ImClone shares has drawn investigators' scrutiny, said Houston lawyer Christopher Bebel, a former federal prosecutor who has watched the case closely.

"The prosecutors believe Dr. Waksal has information which will directly or indirectly target Martha Stewart, and as a result, the government is trying to coerce Dr. Waksal into cooperating," Bebel said.

Lawyers for Stewart, the chief executive of Martha Stewart Living Omnimedia Inc., issued this statement through a public-relations firm yesterday: "Sam Waksal's guilty plea has nothing to do with Martha Stewart." Beyond that, Stewart and her representatives offered no comment.

Waksal, 55, an immunologist, entrepreneur and former A-list New York socialite, pleaded guilty yesterday to six of the 13 felony counts lodged against him in a federal complaint in June. Together, the six charges carry a maximum prison term of 65 years.

In a brief statement outside the Lower Manhattan courthouse after entering his plea, Waksal said "I've made some terrible mistakes, and I deeply regret what has happened. I was wrong."

During the hour-long hearing before U.S. District Judge William H. Pauley III, Waksal detailed the chain of lies, fraud and cover-up that surrounded his desperate attempt to dump ImClone shares in December ahead of a devastating U.S. Food and Drug Administration ruling against ImClone's most prominent cancer drug, Erbitux.