Onetime powerhouse Chicago alderman Edward Vrdolyak, who went to prison after pleading guilty to a high-profile financial scam in 2008, has again landed in the crosshairs of federal authorities, the Chicago Sun-Times has learned.
This time, it’s regarding allegedly concealed payments tied to the state’s landmark $9.1 billion settlement with tobacco companies in 1998, sources said.
Vrdolyak surfaced in a federal indictment unsealed Thursday that accused Daniel Soso, a Chicago attorney, of evading nearly $800,000 in income taxes.
Vrdolyak isn’t identified by name in the Soso indictment and hasn’t been charged with any wrongdoing in the case. But the indictment cites an unnamed “Individual A.” Vrdolyak is Individual A, two sources with knowledge of the case told the Chicago Sun-Times.
According to the Soso indictment, neither Vrdolyak nor his law firm was authorized to perform any of the work the state hired law firms to handle in connection with its fight against tobacco companies.
But Vrdolyak and Soso, 63, of Alsip, allegedly made a secret agreement with a third person to be paid “a portion of the attorney fees awarded in the tobacco lawsuit and concealed these agreements from the state of Illinois, the Illinois attorney general and others,” according to Soso’s indictment.
In 1998, Illinois reached agreement with tobacco companies to settle the state’s lawsuits over the harm caused by tobacco products. The deal projected $9.1 billion in payments to the state, with fees to go to law firms that handled the case.
“That was a long time ago, and Ed is now 77,” Vrdolyak attorney Michael Monico said Saturday. “We have not been advised what the investigation is about, but we are confident that Mr. Vrdolyak did nothing wrong.”
Vrdolyak pleaded guilty in 2008 to federal charges stemming from the $15 million sale of a Gold Coast building owned by the former Chicago Medical School, now the Rosalind Franklin University of Medicine and Science.
Vrdolyak served less than a year in prison after admitting he schemed with fellow medical school board member Stuart Levine to split a $1.5 million kickback from the sale of the building to Smithfield Properties Development.
Levine became a cooperating witness in the federal probe of the deal and wore a wire on Vrdolyak. The sale went through, but Levine’s cooperation became public, and the kickback never happened.
At his 2009 sentencing hearing, Vrdolyak acknowledged receiving quarterly payments of $30,000 from the tobacco company lawsuits — even though it wasn’t disclosed at the time of the tobacco settlement that his law firm was involved.
According to court records, a Seattle law firm that was designated to receive a portion of the settlement proceeds sent Vrdolyak a letter in 1999 stating: “As to the fees to be awarded in the Illinois tobacco litigation, we agree that you will receive 10 percent of national counsel’s fees.”
The former 10th ward alderman was widely known during his time on the Chicago City Council by the nickname “Fast Eddie” after developing a reputation for dancing on the edge of a law but remaining on the right side of it. He was known for saying he always assumed anyone he was talking with might be wearing a wire.
In 2009, a federal judge initially gave Vrdolyak a big break, giving him no prison time for his role in the Levine scheme. But prosecutors appealed, and Vrdolyak ended up resentenced to 10 months in prison and 10 months of home confinement and work release.
