Ex-investment adviser Litwok convicted of fraud

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A former East Hampton investment adviser who has been embroiled in numerous legal disputes with clients - including comedian Lily Tomlin - was rapidly convicted yesterday of fraud and evading more than $1 million in federal income taxes by a jury at the federal court in Central Islip.

Evelyn Litwok's attorney, Terrence Buckley, said, "We are very disappointed in the verdict and plan an appeal." Assistant U.S. Attorney Burton Ryan declined to comment afterward.

During its hour and a half of deliberation, the only item the jury asked for was the rehearing of a telephone tape recording.

On that recording, federal prosecutors said Litwok admitted to part of the fraud that involved obtaining a phony expense receipt for more than $1,700 for staying at a guest house. The guest house was supposedly on the property of East Hampton gallery owner Ruth Kalb. Litwok told insurers that she stayed at the guest house while her own home was being repaired for severe water damage. All told, prosecutors said the overall insurance fraud for various supposed damages amounted to $80,000.

Kalb, who cooperated with federal postal inspectors investigating the Litwok case, was not accused of any wrongdoing. Kalb, who also uses the name Vered, gained some notoriety last summer when she was arrested and fined $200 for serving alcohol without a permit at her gallery, according to officials.

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When postal inspectors went to Kalb's property, they noted that there was no guest house, according to trial testimony by then Postal Inspector Sol Farash. The inspectors then persuaded a friend of Kalb's to tape a phone conversation with Litwok.

On the tape, Litwok admitted that the bill was false, prosecutors said, saying, among other things, "It was the only lie in the whole case."

Kalb did not return a telephone message seeking comment. An employee of her art gallery said that he had passed the message on to her.

Tomlin and her partner Jane Wagner won a $2.3 million civil judgment against Litwok for her handling of their investments in an unrelated case, according to court papers.

Litwok faces up to 51 months in prison when she is sentenced by U.S. District Judge Leonard Wexler.

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