Evening star., 1940-07-02
Annenberg Wins Stay
OF 1hree-Year Term;
Seeks C|emency
Cites Agreement to Pay
Government $4,000, 900
To Settle Tax Claims
~ the Associated Press.

xy the Associated Press.
CHICAGO, July IN. l.. Amen.
berg, who made millions In pub.
fishing, racing news and real estate
enterprises, has been sentenced to
three years in prison for evadins
income taxes, but he remained free
today pending court ruling on his
plea for suspension Of the penalty
The defendant, grave and nerv-
Gus, cupped his right hand around
his ear yesterday afternoon while
Federal Judge James H. Wilkerson
pronounced Judgment In a capacity
taxed chamber. Annenberg then
slumped back in his chair. He
seemed dazed.
Defense Counsel Weymouth Kirk
land quickly began q move to keep
his client from the penitentiary. He
filed a petition for probation and
suspension Of the sentence. The
jurist agreed to stay execution Of
the penalty for 20 days and an
nounced he would rule on the re-
quest for clemency before that time
had passed.
100000 Bond Stands.
Annenberg's original 100000 bond
was allowed to stand.
The petition for probation set
forth that Annenberg was 63 and
mot in good health; that he had
never been convicted of a crime;
that failure to pay taxes listed in
the indictment was due primarily
to Inadequate and inexperienced"
bookkeepers; that he had agreed to
pay the Government 100000 and
interest in settlement of civil tax
claims, and that his family was
absolutely dependent" on the con-
tinued operation Of his businesses.
Annenberg, publisher Of the Phila-
delphia Inquirer, magazines and
sports periodicals and former ruler
of q Nation wide turf information
empire, pleaded guilty on April % to
evading $1,217,296 in taxes on his
1885 earnings. That constituted one
count of a six-count indictment al
leging failure to pay $5,548, 1884 in
levies on his 1926 income. It was
the largest criminal tax case against
an individual in history.
Sentence Called 'Fair."
His admission of guilt on the one
count could have entailed q maxi
mum punishment Of five years i'm
prisonment and q $10e0O fine, or
both. United States District Attor-
ney William ]. Campbell termed the
three-year penalty "eminently fair"
He reported that the remaining
cases against Acknowledgements
other tax matters, lottery charges
and conspiracy to influence grand
Jury witness-would be dismissed.
Joseph E. Hafner, Annenberg's
chief bookkeeper, was sentenced to
five months on his plea of guilty to
aiding and abetting in the evasion.
He retained his liberty on 5000
bond pending decision on his petit
ton for probation.
Before sentencing Annenberg,
Judge Wilkerson read an 11-page
statement. He asserted he was not
concerned" with Annenberg's
agreement to pay the Treasury $8,-
100000 in settlement Of his esti-
mated $12,000,000 civil tax debt. Ar
rangements were made to pay 1t in
installments spread over a period
ending June 80, 1916. With interest,
the total may approximate 100000
900. Defense counsel has contended
the Annenberg family has mort
gagged virtually everything they
own" to secure the payments.
Raps Tax Evaders.
The jurist commented that the
Secretary Of the Treasury, with the
approval Of the Attorney General,
could have compromised the GRIM
inal as well as civil liability, but had
not done so. He added:
Tax evaders should understand
that they may not make a compro-
mise with the Treasury Department
and then expect to receive from the
courts consideration in criminal
cases which the executive officers Of
OiIc oI1GCu 0GdCCo Will IlOG dSotuAC
the responsibility OF granting"
Referring to request for clem-
ency made by Annenberg's attorney
during a hearing early this month,
the Judge stated:
ITO grant the plea of the defend
ant in this case would be to say to
businessmen: You may organize
your affairs in a network of corpora
tions and avoid the payment of your
Just taxes and when called to ac-
count by tho Government for what
you really owe, nothing worse will
happen to you than to be compelled
to pay what you should have paid
long ago"
"Matters in Mitigation"
Judge Wilkerson decided that the
reasons Annenberg advanced for
entering his admission could not
change the effect of the plea. He
mentioned Annenberg's "solicitude
for the welfare of his son, the desire
to settle his liability to the Govern
ment" and q wish to avoid the