Former Ald. Edward Vrdolyak was sentenced to 18 months in prison Friday in a long-running tax case.
U.S. District Judge Robert Dow called the case “a particularly sorry story because this is two experienced lawyers who were involved in this crime.” The other was Vrdolyak’s co-defendant, Daniel Soso.
Dow said he will have a hearing in three months to discuss when Vrydolyak will report to prison. “I am not going to send Mr. Vrdolyak to prison during COVID,” the judge said.
Vrdolyak spoke briefly to the judge during the virtual sentencing hearing. Taking off his mask, the 82-year-old apologized. “What happened was my own fault, and I take full responsibility,” he said.
In an appeal for no prison time, a member of Vrdolyak’s defense team, talking about his medical condition, said he has fallen four times in the past two years. She held up a photo of him after his last fall. His eye looked swollen and there was a bandage on his head. “He looks like he was in a fist fight,” she said.
The prosecutor insisted “that is not a sufficient response to the gravity of the crime and to the history and the characteristics of the defendant.”
It has been 21 months since Vrdolyak pleaded guilty to tax evasion and four years since the feds quietly filed an indictment outlining his role in a bid to pocket millions from Illinois’ two-decade-old settlement with tobacco companies.
Last month, prosecutors revealed Vrdolyak had collected more than $12 million from that settlement, alleging he did no work on the litigation. While the feds asked a judge to send Vrdolyak to prison for more than two years, Vrdolyak’s defense attorneys asked for probation or home confinement. They said he had a brain tumor and pointed to the pandemic.
Vrdolyak’s co-defendant in the case, Soso, was sentenced early this year to two years in prison for dodging taxes.
Prosecutors had previously said Vrdolyak and Soso “received in excess of $10 million in fees” from the tobacco settlement. They also once told a judge that Vrdolyak “has a guaranteed income stream of $260,000 per year … until 2023 from tobacco-related litigation.”
Illinois’ $9.3 billion court settlement with tobacco companies also led to $188.5 million in payments to outside law firms that helped with the litigation.
The feds say Soso and Vrdolyak struck a secret deal with Washington state attorney Steve Berman to collect some of that money, even though they “did not perform any work.” But in court filings last month, Vrdolyak’s attorneys said he was “an integral part” of the reason Berman’s firm wound up working with the Illinois attorney general on the case in the 1990s.
“With Mr. Vrdolyak’s background, connections, and acumen regarding local and state politics, particularly the fact that he was a Republican in a Republican-led state, Mr. Vrdolyak’s mentorship to the process would have been unbelievably valuable,” they wrote.
Vrdolyak’s attorneys have also insisted it was no secret Vrdolyak would receive money from the agreement. They’ve complained about the failed memories of key witnesses, including former Attorney General Jim Ryan. There have also been suggestions Vrdolyak was left off the paperwork because he was “too publicly known and too controversial.”
Assistant U.S. Attorney Amarjeet Bhachu wrote in a court filing ahead of Soso’s sentencing that law enforcement interviewed Ryan, and though health problems had affected his memory, Bhachu wrote that Ryan “was clear and consistent that he never authorized Vrdolyak or Soso’s involvement in the litigation.”
He also wrote that Ryan was given a “non-target letter” by the government.
The deal between Berman, Soso and Vrdolyak evolved over time, according to court records. In May 1999, records show Berman sent Vrdolyak a letter indicating Vrdolyak could expect to collect $65 million. Vrdolyak agreed in writing to give part of that money to Soso.
Vrdolyak paid Soso $1.9 million between 2000 and 2005, according to Soso’s plea agreement. Prosecutors said early this year that Soso wound up collecting more than $3 million since 2000 from the tobacco litigation.
Meanwhile, Soso was dodging taxes. So the IRS served Vrdolyak’s law firm with a levy in 2005, demanding he pay the agency any money he owed to Soso. Instead, Vrdolyak stopped paying Soso and told the IRS he owed Soso nothing.
Vrdolyak continued to accept money that Soso was due. Then, in 2010 and 2011, Vrdolyak directed $170,242 to Soso instead of sending it to the IRS.
A member of the City Council from 1971 to 1987, Vrdolyak earned the nickname “Fast Eddie” for his backroom deals and reputation for dancing on the edge of the law. He was known for saying he always assumed anyone he was talking with might be wearing a wire.
In a court filing last month, Vrdolyak’s lawyers wrote “‘Fast Eddie’ is not an alias; he has never called himself that and it was an unsolicited moniker concocted by the media many years ago.”
A federal judge gave him a big break in 2009, after Vrdolyak pleaded guilty to fraud. The judge handed Vrdolyak no prison time for his role in a scam with influence peddler Stuart Levine. But prosecutors appealed, and another judge ultimately sentenced Vrdolyak to 10 months in prison.
