Rocky Mountain News

HomeBusinessMore Business

Aspen developer gets 15 months

George Gradow faces prison after pleading guilty to tax fraud

Published April 28, 2006 at midnight

Aspen developer George Gradow will see his daughter graduate from high school in early June, but that likely will be one of his last moments of freedom until late 2007.

Gradow, about to turn 66, was sentenced Thursday to 15 months in prison after pleading guilty to tax fraud and fudging financial documents in a bid to mislead Internal Revenue Service auditors.

"I'm glad this is over," he told reporters as he walked out of Judge Wiley Daniel's federal courtroom in Denver ahead of his wife, former Playboy bunny Barbi Benton. "It was a terrible time for my family."

Gradow has a law degree and a master's in taxation, and prosecutors portrayed him as a smart and sophisticated businessman who lived a lavish lifestyle and broke the law because he was greedy.

"This defendant does not stand before you with clean hands," Assistant U.S. Attorney Robert Mydans said in a hearing. He also urged the judge to "send a message" to the wealthy that the tax system should not be manipulated.

But Gradow's lawyer, Joseph Thibodeau, said his client suffers from major depression and anxiety that caused him to lose control when the IRS was investigating his company, the Churchill Group.

A psychiatrist testified in court that Gradow had contacted chemical makers, seeking cyanide to kill himself and had bought a book to study ways to commit suicide.

"He was seriously considering dying," said Rebecca Barkhorn, who evaluated him twice in 2004.

Benton, Gradow's wife who sat in the second row with her two children, briefly addressed reporters before leaving federal court, comparing her husband to Martha Stewart, who served a five-month prison sentence last year for lying about a stock sale.

"I'm very disappointed," said Benton, who with her husband lives in one of Aspen's most eye-catching homes, a 25,000-square-foot estate called the Copper Palace. "I think Martha got a bad rap, and George got a bad rap. I think they're going after the wrong people."

Asked who are the right people, she replied: "O.J."

Mydans said any prison will be equipped to deal with Gradow's mental health problems and cast doubts on the depression story. Gradow is scheduled to report to prison on June 12.

An IRS probe and the possibility of going to jail, Mydans said, "would probably put anybody into a state of depression or a tailspin."

Gradow also is forced to cough up to the IRS the roughly $128,000 in taxes he failed to pay and is subject to a $5,000 fine. Thibodeau said the check for the former amount is in the mail.

Requesting a lighter sentence, the lawyer had argued that Gradow's misdeed was "not the result of a carefully, considered plan," but a regrettable one-time act committed by a depressed man.

The meager amount in question, he said, suggests that is the case.

"For him to risk everything for $128,000 is beyond comprehension," Thibodeau said in court.

The lawyer, reached after the hearing, said he doubted he would appeal the case but that it was too early to say.

Gradow asked to serve his time at a prison camp at the Federal Correctional Institution Englewood, in the southwest metro area.

Back to Top

Search »