February 25, 2004

PRESS RELEASE

ART DEALER CONVICTED OF CONSPIRING TO FAIL TO PAY ESTIMATED TAX

Boston, MA... A New York City art dealer pleaded guilty yesterday to conspiring to fail to pay estimated taxes in connection with the attempted sale of two pieces of fine art.

United States Attorney Michael J. Sullivan; Robin M. Avers, Special Agent in Charge of Immigration and Customs Enforcement in New England; Joseph A. Galasso, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation; and Kenneth W. Kaiser, Special Agent in Charge of the Federal Bureau of Investigation in New England, announced that ARNOLD KATZEN, age 64, of New York City, pleaded guilty before U.S. District Judge Reginald C. Lindsay to a superseding Information charging him with the misdemeanor offense of conspiring to fail to pay estimated tax.

At yesterday's plea hearing the prosecutor told the Court that, had the case proceeded to trial, the evidence would have proven that KATZEN's co-defendant Shirley D. Sack, who represented herself to be a dealer of fine art, and KATZEN, an international dealer in fine art, traveled to Boston where they attempted to sell two paintings for $4.1 million in cash to an undercover federal agent. The two works of art, which were seized by the United States from KATZEN and Sack, were an original oil painting entitled "Jeune Femme aux Yeux Bleus" by Amedeo Modigliani valued at approximately $2.5 million, and an original pastel entitled "La Coiffure" by Edgar Degas valued at approximately $1.6 million. KATZEN and Sack would have been required under federal law to pay an estimated tax on their profits from the sale of the works of art but they willfully conspired and agreed not to pay such a tax.

Judge Lindsay scheduled sentencing for June 21, 2004 at 2:00 p.m. According to a plea agreement filed with the Court, both parties have agreed to a sentence of 3 years' probation. In addition, KATZEN has agreed to the forfeiture of his interest in "La Coiffure" by Edgar Degas which will be carried out civilly or administratively by the United States government. KATZEN and Sack had possession of the "Jeune Femme aux Yeux Bleus" painting by Amedeo Modigliani for consignment sale.

Sack, age 73, of New York City, is scheduled to plead guilty before Judge Lindsay on March 22, 2004, at 2pm to her role in the scheme.

The investigation was conducted by Immigration and Customs Enforcement, the Internal Revenue Service, Criminal Investigation, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Laura J. Kaplan in Sullivan's Organized Crime Strike Force Unit.

Press Office: Samantha Martin, (617) 748-3139