John Mazzuto ’70, whose $1.7 million gift of stock to the University in 2007 incited controversy when he was accused of having stolen from the company he ran, entered a secret guilty plea for his crime, Bloomberg reported Monday.
While serving as CEO of the automotive chemical company Industrial Enterprises of America, Inc., Mazzuto issued millions of stock shares to third parties — including Yale, prosecutors said. Under an agreement in New York state court, Mazzuto pled guilty to two counts of grand larceny, a scheme to defraud and violating general business law by inflating stock values and frauding investors. Although the agreement was reached Jan. 14, its terms were just released to the public, Bloomberg reported.
Under terms reached between Yale and IEAM in January 2011, Yale paid a $1 million settlement to Mazzuto’s former company. According to that agreement, IEAM did not fault Yale for accepting Mazzuto’s original gift, University spokesman Tom Conroy said in a January agreement.
As a part of Mazzuto’s plea, he will testify against his former business partner, James Margulies, who served as IEAM counsel and chief financial officer. Margulies has denied the charges served against him, including grand larceny, a scheme to defraud and conspiracy.