Boesky Pleads Guilty to One Felony Charge : Court Documents Indicate That Probers Are Looking at Deal Involving Posner

NEW YORK — Ivan F. Boesky pleaded guilty Thursday to a felony charge of conspiring to make false statements to the Securities and Exchange Commission. The plea satisfied one condition of his record insider trading settlement with federal authorities.

Court documents detailing the specific charge against Boesky, whose cooperation with federal prosecutors has already led to guilty pleas by three of his Wall Street associates, indicate that investigators may now be probing a transaction he undertook with controversial Miami financier Victor Posner.

Posner was not named in the documents filed in the case Thursday by the office of U.S. Attorney Rudolph W. Giuliani. But the legal charge against Boesky states that from 1984 to mid-1985 he filed false documentation concerning his agreement to accumulate stock in Fischbach Corp., a New York electrical contracting firm, for an unidentified party.

Other government documents show that Posner acquired a controlling interest in the same company over the same period of time, ultimately by purchasing Boesky’s holdings. Executives of Fischbach could not be reached for comment.

Boesky’s plea Thursday in federal court was his first scheduled public appearance since Nov. 14, when the SEC announced that he had settled insider trading charges by agreeing to pay $100 million in fines and penalties and consenting to a permanent bar from the U.S. securities industry.

‘Range of Criminal Activity’

He also agreed to cooperate with further investigations by the SEC and the U.S. attorney’s office and to plead guilty to one unspecified federal felony carrying a maximum sentence of five years in jail and a fine of $250,000.

As it happens, the felony to which Boesky pleaded Thursday does not involve insider trading allegations. Giuliani said later that the choice of the specific charge was discretionary. “There were options,” he said. “It’s not unfair to say that Mr. Boesky was engaged in a range of criminal activity.” Under the plea agreement, he said, neither Boesky nor any of his investment firms will be charged with any other criminal counts.

Once known for his authoritative manner and cold, toothy grin, Boesky sat silently between his two lawyers in the front row of a cavernous federal courtroom here, glumly fingering the knot of his tie as he waited to file his plea before District Judge Morris E. Lasker. In the minutes before the court was called to order, he found himself enveloped by a crowd of television artists hastily sketching his portrait.

To each of Lasker’s routine questions about whether he understood the implications of his plea bargain, Boesky replied with an almost inaudible, “Yes, sir.”

Lasker, clearly irked by reports that his reputation as a lenient sentencer had inspired the timing of Boesky’s plea, briefly lectured Boesky that reputations can be misleading.

“I want to talk turkey,” Lasker said. “Do you understand that I alone have the authority to decide whether you should receive up to the maximum sentence?” Boesky replied: “Yes, your honor.” After the sentencing date was set for Aug. 21, Boesky left the courthouse, flanked by his lawyers, without saying another word in public.

Giuliani later declined to speculate on how severe a sentence Boesky might receive. He noted that no person has ever received more than a four-year jail term on insider trading charges, adding that Boesky’s “cooperation has been extremely valuable. . . . As time goes on, the value of his cooperation will become evident.” The extent of his cooperation, as well as the nature of all his criminal activities, will be set before the judge before the sentencing, Giuliani said.

Boesky’s testimony to the SEC and Giuliani’s office has already generated criminal charges against former stockbroker Boyd L. Jefferies, former investment banker Martin A. Siegel and Michael Davidoff, a former chief trader for Boesky’s own investment firms. All have pleaded guilty to criminal charges and are also cooperating with investigators.

The nature of Thursday’s felony charge indicates that Boesky may also have given evidence concerning his sale of Fischbach stock to Posner, the Miami financier convicted last year of income tax evasion.

The charge states that in early 1984, at the behest of an unnamed “conspirator,” Boesky began accumulating shares in Fischbach, a New York contractor best known for its work on power plants for the ill-fated Washington Public Power Supply System.

The conspirator asked Boesky to acquire more than 9.9% of Fischbach, while secretly promising to reimburse Boesky for any losses he might incur in holding the stock.

In the course of acquiring more than 400,000 Fischbach shares, or 13.4% of the firm, Boesky filed a series of disclosure reports to the SEC, known as 13-D forms. These, the federal charge states, were false and thus illegal because they did not reveal the reimbursement promise.

Boesky did ultimately suffer a loss when he sold his shares and a related holding of convertible bonds on Feb. 28, 1985. Although the government charge does not disclose the size of the loss, SEC documents indicate that he paid $21.3 million for the shares and sold them on the London Stock Exchange for $18.4 million, a loss of $2.9 million. The loss was reimbursed by the “conspirators,” the government charged.

Other SEC filings obtained by The Times show that the shares and debentures sold by Boesky on Feb. 28, 1985, were acquired by Pennsylvania Engineering, a company controlled by Posner, on the same day and at the price Boesky received. Whether the shares were purchased through an intermediary could not be determined.

Penn Engineering’s acquisition, which was financed through Drexel Burnham Lambert, was instrumental in pushing Posner’s ownership of Fischbach over 50%. Posner later took control of the Fischbach board, of which he is now chairman.

Posner was unavailable for comment Thursday, but Renee Mottram, a spokesman for Sharon Steel, one of his corporate vehicles, issued a statement reading: “No individual in our company or any of our companies has been charged or accused of anything. Therefore, we have nothing to say regarding Mr. Boesky or his plea.”