December 23, 1998

Matthias Hoffman, German promoter who organized 1996 world tour by the tenors Luciano Pavarotti, Jose Carreras and Placido Domingo, is sentenced to prison in Germany for evading close to $10 million in taxes; German authorities are investigating possible complicity by the tenors themselves; prosecutors say Hoffman illegally split the singers' payment for each concert into $500,000 in salary and $1,000,000 in licensing income, paying the latter sum into a front company based in Ireland that apparently was controlled by the three tenors (M)

Duke defeats Kentucky, 71-60, and Purdue defeats South Carolina, 80-64, in Jimmy V Classic college basketball doubleheader; photo (M)

Federal Reserve votes to hold interest rates steady, judging that three recent rate reductions have given economy big enough kick to keep it growing at healthy pace into 1999; move is latest sign that sense of crisis felt by economic policymakers in US and abroad over summer is easing; although analysts still expect US economy to slow substantially in 1999, perhaps enough to require further rate cuts, continuation of nation's long expansion no longer appears to be in any immediate danger (M)

Federal securities regulators accuse W R Grace & Co and six of its former executives of fraud for allegedly deceiving shareholders over five-year period by falsely reporting earnings; say company shifted $10 million to $20 million from early 1990's when revenues were high to later years when business was not as good; says by using false accounting, company was able to report that revenue was on rise for its health care group from 1991 to 1993, even though actual revenue was declining; Grace denies allegations; suit is part of larger plan by Securities and Exchange Commision to crack down on growing number of companies, including some of nation's largest, that break accounting rules so they can manipulate earnings to meet Wall Street's expectations (M)

Matthias Hoffmann, the German promoter who turned the Three Tenors into a worldwide sensation, was sentenced yesterday to more than five years for tax evasion. The court in Mannheim, Germany, said prosecutors were also investigating the tenors -- Luciano Pavarotti, Jose Carreras and Placido Domingo. Article, page E1.