Former Beneficial CEO Tied to Massive Tax Probe
He seemed, in many ways, like a man from another time, a Gatsbyesque figure who glided through a world of old money, private clubs and pedigree horses, his family name emblazoned on Ivy League halls.
Then, in an instant, he was gone — his privileged life ended, by his own hand, with a single gunshot to the head.
No one can know exactly what Finn M. W. Caspersen, a prominent philanthropist and the heir to the Beneficial Corporation fortune, was thinking when he decided to take his life on Labor Day. Although Mr. Caspersen, 67, was battling kidney cancer, his suicide shocked his family and friends.
But Mr. Caspersen, a patron of Harvard and Princeton who gave away tens of millions of dollars to charity, apparently harbored a secret: He was suspected of dodging many millions in federal taxes. The authorities, it seemed, were closing in.
At the time of his death, investigators were building a case against Mr. Caspersen on suspicion of using secret offshore bank accounts to evade taxes.
The authorities had asserted he might have owed as much as $100 million in back taxes and fines or, possibly, even have faced prison, according to a person briefed on the investigation, who was granted anonymity because of the delicacy of the case and the events surrounding Mr. Caspersen’s death.
Whispers of some sort of tax trouble went through the crowd at Mr. Caspersen’s funeral on Tuesday. About 800 people attended the service in Morristown, N.J. “He made everything right for so many people, and that is why this is such a tragedy,” Susan Wachter, a friend and former Beneficial board member, said of Mr. Caspersen’s death.
Mr. Caspersen’s widow, Barbara, declined to comment as did other family members. But friends and business associates struggled to come to terms with the suicide of a man many characterized as larger than life. “I’m shocked by his death,” said Philip Richter, a former managing director at Knickerbocker, Mr. Caspersen’s private investment firm.
The precise nature of the tax investigation was unclear. What is known is that Mr. Caspersen, a longtime fixture in New Jersey political circles, had been swept up in a broad, federal crackdown on the use of offshore bank accounts by wealthy Americans. UBS, the big Swiss bank, divulged the names of nearly 300 of its American clients in February and agreed to hand over several thousand more last month.
One wealthy UBS client, Igor Olenicoff, hid an estimated $200 million in Switzerland and Liechtenstein. In 2008, he pleaded guilty to a single federal tax felony and paid $52 million in back taxes and penalties. More recently, several other UBS clients, among them a Florida yacht broker, admitted to tax evasion.
As the inquiries continue, the names of more well-to-do people are likely to come to light. Those who have hidden money offshore face a difficult choice: They have a week to turn themselves over to the Internal Revenue Service or gamble that they will not be caught. The I.R.S. is offering amnesty to those who disclose their offshore holdings by Sept. 23. After that, offenders could face criminal prosecution.
The Caspersen case centers on bank accounts in Liechtenstein, which, like Switzerland, is a leading offshore haven. The I.R.S. learned that Mr. Caspersen held an account at LGT, the private bank controlled with Liechtenstein’s royal family, according to the person close to the investigation. Liechtenstein pledged last December to disclose the names of some wealthy Americans with bank accounts there, but it was unclear if Mr. Caspersen’s name was among them or how the I.R.S. learned of any account in his name.
The questions are unlikely to end with Mr. Caspersen’s death. His family was associated with Beneficial, the consumer lending giant, for most of the 20th century. Mr. Caspersen ran the company for 20 years before selling it to Household International in 1998 for $8.6 billion.
That year Mr. Caspersen established Knickerbocker, which he named after the men-only Knickerbocker Club, on the Upper East Side, to which he belonged. At that time, Knickerbocker oversaw about $1 billion, most of which represented the Caspersen fortune.
According to the person familiar with the investigation, federal authorities recently placed liens on the personal trusts of Mr. Caspersen’s four sons, Finn M. W. Caspersen Jr., Erik M. W. Caspersen; Samuel M. W. Caspersen; and Andrew W. W. Caspersen.
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Like Mr. Caspersen, his sons are graduates of Harvard Law School, where the Caspersen Room houses rare books, documents and artwork. Last year, Mr. Caspersen pledged $30 million to Harvard Law, the largest single donation in the school’s history.
Henry Christensen III, a lawyer for Mr. Caspersen’s sons, declined to comment.
People who knew Mr. Caspersen characterized him as larger than life. Lawrence E. Bathgate II, a New Jersey lawyer who is a former national Republican Party finance chairman, came to know Mr. Caspersen when Thomas H. Kean first ran for governor in 1981. He said the governor’s backers wanted to make a splash when he won but were hampered by restrictions on how much they could raise for inaugural events.
Nonetheless, Mr. Caspersen made one black-tie party memorable by arranging for an antique wooden carriage, led by four matched horses, to bring the departing governor and the incoming governor to the party at the governor’s mansion on a cold winter night in 1982. The footman was in period costume, as was the man who held four reins by the hand.
Mr. Caspersen, an accomplished equestrian, was the driver, Mr. Bathgate said. “I was talking to Governor Kean about it a couple of days ago, and we both agreed he was a throwback to a gentlemen of a prior time,” Mr. Bathgate said.
Mr. Caspersen’s health and financial situation apparently weighed on him in recent months.
Gerald L. Holm, a longtime friend and business associate, said Mr. Caspersen had mentioned that he was being audited by the I.R.S. but that he had not gone into details.
Mr. Holm said that Mr. Caspersen was “like a second father to me.”
He said, “Finn was never the type who was going to give his innermost secrets to anybody.”
Others said Mr. Caspersen’s health had worsened in recent months. On Labor Day afternoon, Mr. Caspersen’s despair apparently overtook him, and he shot himself to death on the grounds of the Shelter Harbor Golf Club in Westerly, R.I., the seaside community where he had a summer home, according to the local police. Mr. Caspersen was a founder of the club.
Shortly before his death, Mr. Caspersen placed his estate and nearby land in Westerly on the market for $10.9 million and began to step back from various philanthropic efforts.
He unexpectedly resigned from the Dean’s Advisory Council at Harvard Law School — he was in the class of 1966 — and quit as chairman of the board of the Peddie School, the prep school in Hightstown, N.J., from which he graduated in 1959.
He also resigned from the town commission in Jupiter Island, Fla., where he lived, and quietly stepped down as the chairman of the Hodson Trust, a foundation that has awarded $210 million in scholarships and was established by his ancestor Clarence Hodson, the founder of Beneficial Loan Society, later the Beneficial Corporation. But friends said Mr. Caspersen never spoke of his troubles. His friend William B. Warren was a guest in Mr. Caspersen’s Rhode Island house only days before he took his life. “He was cheerful,” Mr. Warren said.