Former Illinois Attorney Sentenced to 18 Months in Prison for Tax Evasion in Connection With Legal Fees From Tobacco Litigation

CHICAGO — Former Illinois attorney EDWARD R. VRDOLYAK was sentenced today to 18 months in federal prison for assisting another lawyer in evading taxes on income received from a multi-billion dollar legal settlement with tobacco companies.

U.S. District Judge Robert M. Dow, Jr., imposed the sentence after a hearing in federal court in Chicago.  Vrdolyak, 82, of Chicago, pleaded guilty last year to one count of tax evasion.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI.  The government was represented by Assistant U.S. Attorney Amarjeet S. Bhachu and Special Assistant U.S. Attorney Michael T. Donovan.

Vrdolyak admitted in a plea agreement that he assisted another lawyer, co-defendant DANIEL P. SOSO, in evading federal income taxes owed by Soso.  The income was derived from attorney fees received in connection with a $9.2 billion settlement between the State of Illinois and a number of tobacco companies in the 1990s.  At the time of the settlement, Vrdolyak and Soso were licensed Illinois attorneys.  The pair collected legal fees from the settlement pursuant to agreements with one of the attorneys that represented the State of Illinois.  Pursuant to these agreements, Vrdolyak made payments to Soso between 2000 and 2005 of approximately $1,925,830, representing Soso’s agreed-upon share of the fees from the litigation.

In August 2005, the IRS served a notice of levy on Vrdolyak, which required the turnover of all salary, wages and other amounts owed to Soso.  Over the next two years, Vrdolyak received approximately $262,854 due Soso, but he concealed receipt of these funds from the IRS, knowing such concealment would assist Soso in evading the payment of taxes and assessments.  Vrdolyak admitted in the plea agreement that he later caused approximately $170,242 to be paid to Soso instead of remitting the funds to the IRS.

Soso, of Alsip, also pleaded guilty to tax evasion.  Judge Dow in March sentenced Soso to two years in prison.