In absentia, Axelrod is told to list assets

Judge issues order in suit against fugitive

By MARYANN SPOTO AND MARK MUELLER
STAR-LEDGER STAFF

A Superior Court judge yesterday ordered disgraced philanthropist Herbert Axelrod to produce a list of his assets, and he placed strict limits on the multimillionaire's spending in connection with a long-running civil suit.

How the judge's order will be enforced remained far from clear. Axelrod, indicted on federal tax fraud charges April 12, has taken refuge in Cuba, his expensive properties in New Jersey and Florida long since sold and the where abouts of his prodigious nest egg unknown.

Judge William Gilroy, sitting in Freehold, did not address the possibility that Axelrod would ignore the ruling, much as he has dodged the criminal charges against him. A warrant can be issued for Axelrod's arrest if he fails to comply with the ruling, but the United States and Cuba do not have an extradition treaty.

The civil case, now in its fifth year, stems from Axelrod's 1997 sale of his pet-care product and book company, Neptune-based TFH Publications, to Central Garden and Pet Co. of California for $70 million in cash and a $10 million loan.

A provision of the sale called for Axelrod to receive additional payments if the company performed well. When those payments didn't materialize, he filed suit. Central Garden countersued, claiming Axelrod had fraudulently inflated the value of TFH.

Yesterday's hearing followed a series of motions filed earlier in the week by Central Garden's lawyers, who were seeking to determine the extent of Axelrod's assets, freeze those assets and compel him to place $17 million in an escrow account. That money would ensure payment if Axelrod were to lose a civil trial.

Similar motions were denied in the past, but Gilroy yesterday said Axelrod's status as a fugitive had altered the equation.

"The court now finds there is a substantial change in the facts and circumstances," the judge said.

Gilroy gave Axelrod a week to produce a list identifying his assets, their location and their value. Gilroy also placed restrictions on Axelrod's spending, ruling that the former Deal resident may not tap into his millions for anything but legal bills, daily living costs and business expenses, which include the salaries of his employees.

In addition, Axelrod is prohibited under the ruling from spending more than $25,000 at a time for any reason without giving lawyers in the civil case 30 days' notice.

The judge denied Central Garden's request that Axelrod place $17 million in escrow. Attorneys for both sides said they will need to review Gilroy's ruling before deciding whether to appeal.

"We thought the judge's decision was well-reasoned," said Robert Gilson, the lawyer representing Central Garden. "He entered most of the relief that we were seeking."

Axelrod's lawyer, Alan Lebensfeld, did not say whether Axelrod would comply with the order.

In a document filed with the court last week, Axelrod claimed he had $30 million in European investment bonds, but he did not say where the bonds were located.

Moreover, the legal papers did not state what has become of other Axelrod money, including $6.2 million gleaned from the sale of his Monmouth County home and $18 million from the deal for which he is best known: the sale of 30 rare stringed instruments to the New Jersey Symphony Orchestra in 2003.

Axelrod was hailed as a hero of the New Jersey arts community when he agreed to the sale, purportedly at a $32 million discount, of the violins, violas and cellos. Thirteen of the instruments were fashioned by master craftsman Antonio Stradivari.

In recent weeks, Axelrod's $50 million valuation of the instruments has been attacked by some of the nation's top violin dealers.

In addition, federal investigators are examining Axelrod's 1998 donation of four Stradivarius instruments to the Smithsonian Institution. The investigation is focusing on whether Axelrod wildly inflated the value of the strings - he claimed they, too, were worth $50 million - to take a massive tax write-off.

Lebensfeld has denied the value of the violins was inflated.

PHOTO CAPTION: AXELROD