Tax Probe Focuses on Donor of Rare Violins Gift to Smithsonian Is Subject of Inquiry Associated Press Monday, May 3, 2004; Page C02 NEWARK, May 2 -- Federal investigators are looking into whether philanthropist-turned-fugitive Herbert Axelrod committed tax fraud when he claimed four Stradivarius musical instruments he donated to the Smithsonian Institution were worth $50 million, the Sunday Star-Ledger of Newark reported Sunday.

Noted violin dealer [a Chicago violin dealer] told the newspaper that he was asked by a federal agent if he believed the collection was worth that much. "I told them I thought the gift to the Smithsonian was on Mars," said [a Chicago violin dealer], who had previously said he believed the collection was worth perhaps $12 million.

Officials at the Internal Revenue Service and the U.S. attorney's office declined to comment to the newspaper on whether they were investigating Axelrod's donation. Representatives of both offices did not immediately return phone calls from the Associated Press seeking comment Sunday.

Axelrod, who has been living in Cuba since fleeing unrelated federal tax charges in the United States, also sold 30 rare stringed instruments to the New Jersey Symphony Orchestra last year at a large claimed discount. That selling price was listed at $18 million -- including $4 million financed by Axelrod himself and later forgiven -- well below the $50 million at which Axelrod valued the 30 instruments.

Axelrod's lawyer said his client did nothing illegal and has not been charged in connection with the Smithsonian gift or the orchestra sale.

A federal fugitive warrant has been issued for Axelrod, 76, on charges alleging he conspired to defraud the IRS by helping a former executive of his pet-book publishing company hide $700,000 in bonuses in a Swiss bank account in the 1990s.