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Former Alderman Vrdolyak Indicted For Tax Evasion

CHICAGO (CBS) -- Former Alderman Ed Vrdolyak has been indicted on federal tax evasion charges, tied to legal fees he and another attorney collected for their work on a lawsuit against several tobacco companies.

The indictment comes 18 months after co-defendant Daniel Soso was charged with income tax evasion for allegedly failing to pay nearly $780,000 in federal income taxes from 1993 through 2013.

Vrdolyak was not named in that indictment, formally added as a co-defendant earlier this month, according to a superseding indictment unsealed on Tuesday.

The new indictment alleges an unnamed "Individual B" -- who was a partner in a Washington state law firm that helped represent the state of Illinois in its lawsuit against several tobacco companies in the late 1990s -- agreed to pay Vrdolyak $65 million from legal fees from the case, even though Vrdolyak did not work on the lawsuit.

According to the indictment, Vrdolyak also made an agreement with Soso to share the money he received from "Individual B."

The indictment charges Vrdolyak with one count of tax evasion and one count of impeding the Internal Revenue Service. The most serious charge against Vrdolyak carries a maximum sentence of 5 years in prison.

Vrdolyak was previously convicted of another federal crime. In 2008, he pleaded guilty to mail fraud, after admitting to scheming with businessman and convicted scam artist Stuart Levine to split a $1.5 million payoff to arrange the sale of a Gold Coast building.

A judge originally sentenced Vrdolyak to probation, but prosecutors appealed the original sentence, and a different judge gave Vrdolyak 10 months in prison in 2011, and fined him $260,000.

Vrdolyak represented the city's 10th Ward from 1971 to 1986, earning the nickname "Fast Eddie" for his reputation for working backroom political deals while steering clear of criminal charges for decades. He also served as chairman of the Cook County Democratic Party from 1982 to 1987, and led a bloc of 29 aldermen who battled the late Mayor Harold Washington during the infamous "Council Wars" era of the 1980s.

Vrdolyak's defense attorney, Mike Monico, says there was no reason for the feds to press charges this week because the disputed money has been put in escrow for the IRS.

"I've been doing this a long time. This is one of the most disturbing cases I've ever seen," he says.

The stakes are high for Vrdolyak. CBS 2 Legal Analyst Irv Miller says the former alderman stands to get a stiffer sentence, if convicted, because of his previous prison time.

 

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