(EMLICO) from the US to Bermuda, is herself facing a potential prison term for tax offences in the US.

Massachusetts state Sen. Dianne Wilkerson, the chairwoman of the Massachusetts legislature's joint committee on insurance, has pleaded guilty to federal charges of failing to file personal tax returns, Business Insurance reported yesterday.

Sen. Wilkerson has admitted that she failed to file tax returns from 1991 to 1994, during which time she had an annual income ranging from $51,624 to $81,558, and owed the government $52,086.

Prosecutors are seeking four months jail time or house arrest and the legislator has said she will seek probation. She could be sentenced on December 16.

The state Senate voted an investigation of the matter by their ethics committee, with a report expected after the sentencing.

The committee on insurance and the legislature's Post Audit & Oversight Committee are investigating the handling by the state's insurance regulators, the Division of Insurance, of EMLICO's application to move to Bermuda. EMLICO is a General Electric Co. (GE) liability insurer that collapsed four months after moving here in 1995.

Senator Wilkerson has been a vocal critic of the regulatory approval in Massachusetts that allowed EMLICO's flight to Bermuda, and critical of a regulatory attempt to establish a US receivership to act in tandem with the company's Bermuda liquidation.

The US receivership was being proposed under a settlement agreement that Sen.

Wilkerson criticised as removing the regulators' right to pursue EMLICO for allegations of fraud over the issue.

She claimed that the commissioner of insurance was negotiating away her investigatory powers and providing releases to those who had committed fraud.

Last December, Sen. Wilkerson urgently asked the state's attorney general to investigate the "troubling'' EMLICO issue, claiming the regulatory process had been compromised.

She said the commissioner of insurance had conceded that EMLICO had not been forthcoming in their application to move to Bermuda, and knew more than they stated about their financial condition, while applying.

But Sen. Wilkerson was also critical of the regulatory process that she said appeared to discuss matters relating to EMLICO's redomestication in private, when they should be the subject of public hearings.

TAXES TAX