(Bloomberg) Oil-industry investor Morris Zukerman faces more than seven years in prison after pleading guilty to federal charges of evading more than $40 million in taxes.

Zukerman’s plea comes just a month after prosecutors accused the 72-year-old of aggressively seeking to evade taxes beginning in 2007, falsely claiming millions of dollars in deductions and providing false information for IRS audits. He admitted to failing to report $28 million in profits from the sale of an oil company and repeatedly lying to his accountants—in one instance creating backdated documents to support his claim.

“These statements to the court mark the start of the difficult and painful process of accepting responsibility for and redressing what I recognize as serious criminal wrongdoing,” Zukerman told a judge in Manhattan federal court, pausing several times to compose himself. He said his guilty plea “gives me an opportunity to repair some of the damage my actions have caused my family, my government, and the many friends, colleagues and business associates.”

Amended Returns
Zukerman plans to file “at least 80 amended tax returns” before his Dec. 5 sentencing date, his lawyer, James Bruton, told the judge in a conference at the bench, adding, “So when you see him next you will see a clean slate.”

“The tax lawyers are working feverishly,” Bruton said. In addition to his guilty plea, Zukerman agreed to pay $37 million to the IRS in unpaid taxes.

Zukerman declined to comment after the hearing, but Bruton said his client is “doing everything he can to do the right thing.”

Zukerman spent 16 years at Morgan Stanley, at one point overseeing its energy practice. He started his own investment firm in the late 1980s, M. E. Zukerman & Co., and his firm’s partners have included ConocoPhillips, Exxon Mobil Corp. and Kinder Morgan Inc. He endowed a Harvard sociology professorship and collected dozens of expensive paintings, including works loaned to the Metropolitan Museum of Art.

Artwork Scheme
The indictment alleged that Zukerman shipped paintings to addresses in Delaware and New Jersey to evade New York state sales tax on artwork that immediately went to his Park Avenue duplex in Manhattan. He didn’t plead guilty to that charge but will pay restitution to New York state of $4.6 million.

Zukerman also took a charitable deduction for money he claimed was donated to a local conservation group in Maine to acquire land on Black Island, when in reality he had simply bought the land himself, according to his guilty plea.

He pleaded guilty to one count of tax evasion and another count of impeding the Internal Revenue Service.

The case is U.S. v. Zukerman, 16-cr-00194, U.S. District Court, Southern District of New York (Manhattan).

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