New York City Councilman Pleads Guilty to Tax Fraud -- Update
By Katie Honan
A New York City councilman pleaded guilty in Manhattan federal
court to a misdemeanor tax-fraud charge for filing fraudulent
information on income and expenses tied to his
real-estate-management business, prosecutors said Thursday.
Chaim Deutsch, a Democrat who represents parts of Brooklyn,
failed to pay $82,000 in taxes owed to the federal government
between 2013 and 2015, according to a criminal complaint.
Prosecutors in the U.S. attorney's office for the Southern District
of New York said he also falsely claimed personal expenses as
Mr. Deutsch, 52 years old, was first elected in 2014 and for
part of his time in office he was the sole owner of Chasa
Management Inc., a real-estate-management business, prosecutors
The councilman faces up to a year in prison and will have to pay
restitution for unpaid taxes, according to the U.S. attorney's
His lawyer, Henry Mazurek, said in a statement that Mr. Deutsch
would repay the taxes he owes. "Mr. Deutsch's dedication to public
service will not be diminished, and he looks forward to completing
his elected term," Mr. Mazurek said.
Mr. Deutsch is term-limited and is set to leave office at the
end of the year.
Council Speaker Corey Johnson, a Democrat, said Thursday at an
unrelated press conference that he wasn't aware of the
investigation and wasn't sure how Mr. Deutsch could continue in his
role. Mr. Johnson said a misdemeanor guilty plea doesn't
automatically lead to a councilmember's expulsion.
"He's not automatically expelled under the charter but I don't
know how he himself would want to continue, given he's pleading
guilty to a very serious federal crime," he said.
Later on Thursday, Mr. Johnson issued a statement calling on Mr.
Deutsch to resign, saying he failed the people of his district.
"He can no longer serve his constituents in good faith," Mr.
In response to the council speaker, Mr. Mazurek said in an
emailed statement that Mr. Deutsch wouldn't resign. "Mr. Deutsch's
ability to carry out his duties as city councilman has not been
diminished by his guilty plea today," the lawyer said.
A spokeswoman for the council said it was also looking to remove
Mr. Deutsch from his committees, including his role as chairman of
the veterans committee, and from his role in allocating some city
funds to organizations in his district.
In February, New York Mayor Bill de Blasio signed into law a
bill that prevents former lawmakers from running for city office if
they have ever been convicted of public corruption.
"There must be real consequences for committing tax fraud and we
will support the actions taken by City Council on this matter,"
mayoral spokesman Bill Neidhardt said about Mr. Deutsch's guilty
The city's Department of Investigation, the U.S. attorney's
office and the Internal Revenue Service conducted a joint
investigation into Mr. Deutsch's tax filings.
"New York City Council Member Chaim Deutsch admitted today that
he defrauded the IRS in connection with his real-estate business,"
U.S. attorney Audrey Strauss said in a statement.
Margaret Garnett, the commissioner of the city's Department of
Investigation, said the conviction was "dispiriting."
"Rather than set an example of integrity and fidelity to the
rule of law, this city councilman's actions placed personal
advantage over the public interest, and undermined public trust in
elected officials," she said in a statement.
Starting in 2018, city council members were prohibited from
earning most outside income in exchange for a significant pay
Queens Councilman Ruben Wills was removed from office in 2017
after he was convicted of fraud and grand larceny, which were
felony charges. He served two years in prison but is running for
office again after the state appeals court reversed the
Last year, the council voted to remove former Bronx City
Councilman Andy King from office following investigations into
alleged misconduct and abuse of staff. He was the first council
member to be removed from the seat without a criminal
Write to Katie Honan at Katie.Honan@wsj.com
(END) Dow Jones Newswires
April 22, 2021 17:04 ET (21:04 GMT)
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