Andrew Stein, The Man Who Wanted to Be Mayor, Admits Tax Scam

Former City Council President and one-time mayoral candidate Andrew Stein pled guilty yesterday to a $1 million tax fraud. This didn’t rate big headlines since Stein long ago faded into the city’s rearview mirror, which is where he always belonged. If he was spotted at all in recent years, it was only because he had wrapped himself around a gorgeous model.

But there was a moment, frightening as it is now to recall, when Andy Stein sat in his City Hall office telling everyone who walked in the door that he expected to be the next Mayor of New York. Thankfully, we dodged that bullet, though the photos of his grimacing grin and piled-high toupee in the rain yesterday outside Manhattan federal court still brought a small shudder of recollection.

Stein now faces up to a year in prison, where, as investment scamster Michael Milken learned the hard way, they don’t allow inmates to keep even the most fabulous gray-streaked toupees.

Stein’s famous wig sparked some nasty laughs at his expense in today’s Post, which led its story with this shot:

“He pleaded guilty to tax evasion, but not lying like a rug.”

Actually, as Barbara Walters tells it in her book, Audition, Milken eventually found going without the toup to be a liberating experience. Walters recounts visiting Milken, an old friend, on a bench under the California sun at the minimum-security federal prison camp at Pleasanton:

“I noticed he was wearing a baseball cap, but not just to keep the sun out of his eyes. The prison didn’t allow him to wear his toupee, so he was covering his head. ‘Why don’t you take the cap off when you get out of here and get rid of the toupee?’ I said to him. ‘Let people see you the way you are.’ Others must have told him the same thing because when we did the interview in 1993, three months after he was released from prison, he was toupee-free.”

Stein’s crime was foolish, as he admitted yesterday. He splurged on the high life — fabulous Hampton rentals, travel, and restaurants — rather than paying his fair share of taxes. “It was willful, sir,” he told U.S. Magistrate Judge Ronald Ellis in court. “There’s no question about it. It was willful. It was stupid.”

But what’s really interesting is that Stein’s wicked ways have led prosecutors to two mammoth frauds in two totally separate investigations.

First there’s this one: Bloomberg News‘s Patricia Hurtado notes today that federal prosecutors were investigating a shell company created by Stein called Wind River LLC when they noticed his dealings with Kenneth Ira Starr, investment adviser to celebrities like Sylvester Stallone and Mike Nichols as well as the everyday fabulously wealthy. The feds soon charged Starr with stealing some $59 million from his clients. Starr, whose fondness for pole dancers made him another tabloid favorite, pled guilty in September.

Then there’s Andrew Cuomo’s massive probe into the state pension system which, as the Voice has reported, began only after investigators began following Stein’s muddy footprints as a favor-seeking investment broker. That epic scandal has now resulted in eight guilty pleas, including that of former city comptroller Alan Hevesi, and political guru Hank Morris.

Stein was never charged in the case, but his dalliance with former TV star Peggy Lipton is what sparked it in the first place.

He also caught a break that Cuomo’s probers didn’t extend their investigation to the city pension system. The Voice found that even as Cuomo was trying to block these insider placement agents who brought little more than their own political influence to the table, Stein shamelessly continued making huge fees off of deals he cut with city pension officials.

Maybe he felt entitled to them, having missed the mayoral ring on the merry-go-round. Stein comes from one of the city’s royal families. His father, Jerry Finkelstein, was long a true power broker. He was city planning commissioner under Mayor Bill O’Dwyer and later publisher of the New York Law Journal. He knew not only where all the bodies were buried, but also those who didn’t know they would be buried. He so loved his name-shortened son that, in the early ’90s, he bought up weekly newspapers all over the city so that they would be there to promote the mayoral campaign.

That wasn’t to be. It must hurt the old man greatly now to see the son shamed in public. Actually, it’s no sure bet that, even now, Andrew Stein feels any shame. He’s just not built that way. Maybe when they take away the toup he’ll start to feel it.