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TV Star Michael “The Situation” Sorrentino Pled Guilty in $8.9 Million Tax Case

According to Law360 “Jersey Shore” star Michael “The Situation” Sorrentino and his brother Marc Sorrentino have agreed to plead guilty in their criminal case over tax-related charges instead of going to trial next month, according to a government letter on January 17, 2018 to a New Jersey federal judge.

The parties told the court Tuesday that the Sorrentinos had agreed to plead guilty, and U.S. District Judge Susan D. Wigenton scheduled a hearing for Friday for the defendants to enter their guilty pleas, according to a one-page letter prosecutors sent the judge Wednesday. The parties thus asked Judge Wigenton in the letter to stay a Wednesday deadline outlined in parts of a scheduling order entered in connection with the brothers' upcoming trial.

The terms of the proposed plea deals were not immediately available.

The anticipated guilty pleas come after both brothers told Judge Wigenton during a Jan. 9 hearing that each had declined a written plea deal dated Dec. 19 without stating the specific terms of the proposed agreement.

Jury selection in the matter had been scheduled for Feb. 8, and opening statements were expected to occur the following week. The trial was slated to last about three weeks.

 In September 2014, Michael and Marc Sorrentino were indicted on one count each of conspiracy to defraud the United States, and three and two counts, respectively, of filing false tax returns for 2010 through 2012. Michael Sorrentino was also charged with allegedly failing to file a tax return for 2011.

A superseding indictment, handed down in April, added charges of tax evasion and structuring funds to evade currency transaction reports against Michael Sorrentino and a charge of falsifying records to obstruct a grand jury investigation against Marc Sorrentino.

The Sorrentinos allegedly created businesses, such as MPS Entertainment LLC and Situation Nation Inc., and failed to pay all of the federal income tax owed on about $8.9 million that Michael Sorrentino earned between 2010 and 2012, according to the superseding indictment. Those businesses earned money from setting up promotional appearances, selling merchandise and arranging book and video deals.

The brothers allegedly filed false tax returns with the Internal Revenue Service that understated gross receipts, claimed fraudulent business deductions, disguised income payments made to them and others, and underreported net business income, authorities said. They also allegedly commingled their business and personal funds and used the money from the business bank accounts to pay for personal items, such as expensive luxury cars and clothing, authorities said.

Michael Sorrentino is accused of evading his 2011 income taxes by failing to file a personal return, filing a false corporate return for Situation Nation and concealing his cash income, authorities said.

According to the superseding indictment, he made multiple cash deposits on the same day in amounts less than $10,000 into different bank accounts, a practice known as structuring, in an effort to evade the banks’ reporting requirements, authorities said.

Authorities also assert that after being served with grand jury subpoenas seeking books and records of MPS and Situation Nation, but prior to producing them to the grand jury, Marc Sorrentino falsified those documents by altering and reclassifying taxable payments to himself as nontaxable payments and as legitimate business deductions.

The brothers' former accountant, Gregg Mark, has admitted to filing false tax returns on their behalf. Mark pled guilty in December 2015 to one count of conspiracy to defraud the United States, admitting that he prepared fraudulent tax returns for the Sorrentinos for tax years 2010 and 2011. He is awaiting sentencing.

The case is U.S. v. Sorrentino et al., case number 2:14-cr-00558, in the U.S. District Court for the District of New Jersey.

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Read more at: Tax Times blog

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