Vrdolyak associate sentenced to 2 years in prison for tax evasion scheme tied to tobacco settlement

A federal judge handed a two-year prison sentence Tuesday to a man accused of dodging taxes while splitting a secret, multimillion-dollar cut of the big-time settlement between Illinois and tobacco companies with ex-Ald. Edward R. Vrdolyak.

Daniel Soso’s three-hour sentencing hearing in the courtroom of U.S. District Judge Robert Dow offered a few clues about how Vrdolyak’s own sentencing hearing may play out next month, but it shed little new light on a case still loaded with questions almost five years after Soso’s indictment.

The judge himself posed one such question at the outset of Soso’s hearing, asking the lawyers, “How did all this start? It’s a mystery to me.” But the question largely went unanswered.

Soso apologized for his crime before learning his sentence, describing the “sorrow” and “shame” he felt in letting his family down. Supporters filled Dow’s courtroom, and the judge said the letters he received on Soso’s behalf “may be the largest group of letters I ever received.”

Among those who wrote on Soso’s behalf was retired Chicago Sun-Times editor Don Hayner, who wrote in his letter that he had known Soso since high school. Hayner called Soso, “one of those give-the-shirt-off his back kind of guys and a steadfast and loyal friend.”

Soso pleaded guilty in February 2019 to a single count of tax evasion, admitting he dodged taxes for the years 1993 through 2004 and 2008 through 2013, costing the government $1.8 million. The allegations revolved around Illinois’ $9.3 billion court settlement with tobacco companies over litigation that began in 1996, which included $188.5 million in payments to outside law firms that helped with the case.

Assistant U.S. Attorney Amarjeet Bhachu wrote in a court filing that Soso managed to get a $3.2 million cut from the litigation “even though he did no work to benefit the State of Illinois.”

Bhachu also noted in his filing that law enforcement interviewed former Attorney General Jim Ryan about the matter. Though health problems have affected Ryan’s memory, Bhachu wrote that Ryan “was clear and consistent that he never authorized Vrdolyak or Soso’s involvement in the litigation.”

The prosecutor also wrote that Ryan was given a “non-target letter” by the government.

Vadim Glozman, one of Soso’s defense attorneys, pointed in court to a Sept. 11, 1996, letter written to Ryan about the tobacco litigation. It mentioned Soso’s name.

“This notion that no one knew Mr. Soso was involved in this is baloney, judge,” Glozman said.

But Bhachu said Soso’s name was left off a letter written five days later. And the judge pushed Glozman about any paperwork that would have documented the work Soso did in the tobacco litigation.

The judge said, “You can’t show me a single time sheet that shows a single hour billed,” and he went on to call the $3 million collected by Soso “absurd.”

Dow also pressed Glozman about Soso’s decision not to pay taxes if he thought the payments were legitimate.

The case against Soso has been pending since May 28, 2015 — the same day a grand jury charged former U.S. House Speaker Dennis Hastert in an unrelated case. But it wasn’t until November 2016 that a superseding indictment added Vrdolyak as a co-defendant.

Vrdolyak pleaded guilty to tax evasion in March 2019 and now faces sentencing April 2. The former alderman had been in charge of giving Soso his cut of the tobacco litigation money. When Soso failed to pay his taxes, the IRS told Vrdolyak to pay it whatever he owed to Soso.

Vrdolyak claimed he didn’t owe Soso a dime. Then he paid Soso $170,242.

There are key differences between the defendants, though. For example, Vrdolyak has a criminal history thanks to the scam that led to a 10-month prison sentence in 2010. Still, Bhachu and Dow signaled Tuesday that sentencing guidelines would call for a lighter sentence for Vrdolyak than Soso.