New York City Councilman Chaim Deutsch admitted Thursday that he defrauded the government of tens of thousands of dollars in taxes by concealing “his true business income,” federal officials said.
Deutsch was charged and pleaded guilty Thursday morning in Manhattan federal court to tax fraud for failing to report business income connected to his real estate company, Chasa Management, according to the United States Attorney’s Office for the Southern District of New York.
The Manhattan feds say the 52-year-old councilman evaded paying $82,076 in property taxes between 2013 and 2015.
“As an elected official and community leader, Deutsch had a particular responsibility to follow the law,” said US Attorney Audrey Straus. “Instead, over a multi-year period, Deutsch concealed his true business income to avoid paying his fair share of taxes.”
The probe was a joint investigation of the city Department of Investigation, the IRS and Manhattan federal prosecutors.
“It is dispiriting when a sitting City Council member is convicted of a crime,” DOI Commissioner Margaret Garnett said.
Council Speaker Corey Johnson called on Deutsch to resign saying he “betrayed that public trust by committing tax fraud.”
“Our constituents rightly expect the people they vote for to uphold the law. Deutsch failed them,” Johnson said. “To protect the integrity of the City Council and his Brooklyn seat, he must resign. He can no longer serve his constituents in good faith.”
Council spokeswoman Jennifer Fermino said the guilty plea was “incredibly troubling news.”
“As a result, we are looking at removing Council Member Deutsch from all his committees, including his position as Chair of the Veterans Affairs Committee, as well as his role dispersing discretionary funding,” she said.
The councilman is not required to give up his seat with the guilty plea, according to council sources.
Deutsch, who was elected in 2014, has no plans to resign despite the conviction, his attorney said in a statement.
“Today, my client pled guilty to a one-count misdemeanor tax office of making a false statement on a tax return,” attorney Henry Mazurek said. “He accepts responsibility for his actions and intends to fully repay the $82,000 in taxes he owes.
“Mr. Deutsch’s dedication to public service will not be diminished, and he looks forward to completing his elected term.”
His current term expires at the end of the year.
The councilman faces up to one year in prison and a year of supervised release, as well as up to $100,000 in fines and restitution.
He is due back for sentencing on July 29.
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