Arnold Aronoff, vice president of Edward C. Levy Co. of Detroit, pleaded guilty today in U.S. District Court to one count of mail fraud in a $3 million land case involving Penn-Dixie Industries Inc.
Aronoff was named last October in a three count indictment with Jerome Castle, former president and chief executive officer of Penn-Dixie from 1967 to May, 1977 and Edward J. Robinson, a former Michigan state senator.
Robinson's case transferred to Detroit where he was tried and convicted last February on two counts of the indictment. He is awaiting sentencing.
Aronoff and Castle had been scheduled to go on trial today, but the trial of Castle was rescheduled for May 30.
Aronoff entered his guilty plea before U.S. District Judge John M. Canella.
He told the court that in June 1973 he had "sent two letters to Penn-Dixie (relating to 5,500 acres of Florida land) and that these letters contained exaggerations . . . and created an illusion that led Penn-Dixie to purchase the property or to pay more for it than they should have."
The said that the property he sold to Penn-Dixie was in an off-shore trust that he held for his children.
Penn-Dixie is a diversified manufacturer of steel and cement and is in road building and other construction.
According to the charges in the indictment, Aronoff and Castle worked out a scheme whereby Aronoff through his offshore trust would buy 12,500 acres of land in Putnam County, Fla. and then sell a portion of it, 5,630 acres, most of which was swampland, to Penn-Dixie.
The Aronoff trust, the indictment claimed, paid $5.7 million for the entire land package and then the next day sold Penn-Dixie its part of the acreage for $5.9 million in cash and notes.
The goal of the scheme, the indictment said, was for Aronoff to obtain the remaining acreage for no investment.
Aronoff is scheduled to be sentence on July 10. He could receive five years in prison and a $1,000 fine.