Jul 31 2017

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Former Ald. Vrdolyak pleads not guilty to tax charges

One of those firms was Seattle-based Hagens Berman, which was headed by attorney Steve Berman. According to the indictment, Berman, identified only as Individual B, entered into a secret agreement in 1996 to pay Vrdolyak and another Chicago attorney, Daniel Soso, fees from the settlement and hide the payments from the attorney general and tobacco companies.

The firm has denied any attempt to conceal payments, and Berman has not been charged with wrongdoing.

Soso, a former Chicago police officer who once ran for alderman with Vrdolyak’s backing, was originally charged alone in May 2015 with failing to pay about $780,000 in taxes related to the settlement money. Vrdolyak was added as a defendant to a superseding indictment filed earlier this month in Soso’s case.

According to the charges, in 2005, while investigating Soso for failure to pay income taxes, the IRS learned that he had been receiving large payments from Vrdolyak and failed to report the income, the charges alleged. The IRS then served Vrdolyak with a levy notice requiring him to pay the IRS instead of Soso because of all the back taxes owed.

That November, Vrdolyak sent a fax to an IRS investigator claiming that he was no longer paying Soso and therefore he owed no money. The fax stated that if there were any payments made in the future he intended to honor the 2005 levy served on him and remit the funds to the IRS, according to the charges.

But according to the indictment, money again began changing hands two years later, with Soso hiding funds paid to him by Berman and Vrdolyak in accounts used by his relatives and girlfriend.

In 2011, Vrdolyak sent payments totaling $170,000 to Soso, including checks that a Vrdolyak relative wrote, the indictment alleged.

Despite Vrdolyak’s reputation for skirting criminal probes, the case marks the second time in less than a decade that the onetime political powerhouse faced criminal charges. In 2010, Vrdolyak was sentenced to 10 months in prison for his role in a $1.5 million real estate kickback scheme that had links to the federal probe that felled then-Gov. Rod Blagojevich.

In that case, Vrdolyak pleaded guilty to helping rig a Gold Coast real estate deal so he could secretly split a $1.5 million finder’s fee with corrupt insider Stuart Levine, a close friend who later wore a wire on Vrdolyak.

In 2009, U.S. District Judge Milton Shadur spurned prosecution calls for prison and sentenced Vrdolyak to probation.

But prosecutors appealed, and the 7th U.S. Circuit Court of Appeals later ordered that a different judge resentence Vrdolyak, calling Shadur’s punishment a slap on the wrist that ignored Vrdolyak’s status as one of Chicago’s most influential insiders. The appeals court also held that Shadur gave too much weight to dozens of letters — including one from then-Bears linebacker Brian Urlacher — attesting to his acts of generosity.

In October 2010, U.S. District Judge Matthew Kennelly sentenced Vrdolyak to 10 months in prison as well as five months in a work-release center and an additional five months in home confinement.

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