Sentencing set for former Gary council member
BY TERESA AUCH SCHULTZ email@example.com October 16, 2013 4:58PM
Updated: November 18, 2013 7:42AM
Former Gary City Councilwoman Marilyn Krusas went 20 years went without filing her federal income taxes, but prosecutors say poverty isn’t what stopped her.
During that same time, she was earning and spending hundreds of thousands of dollars just from investment accounts and inheritances.
Krusas, 70, pleaded guilty in April to one count of tax evasion, admitting she hid a $232,000 inheritance from the federal government to avoid paying taxes she owed after not filing a tax return since 1991.
That evidently wasn’t the only money she came into, however, and she wasn’t using any of it to pay off her debt to the government, according to a sentencing memorandum filed Tuesday in U.S. District Court in Hammond.
Krusas also received in 1996 an inheritance of $20,000 in bonds but never filed a tax return for that year. The next year, she earned $146,149 from a stock transaction but again never filed a return. In 1998, she spent $154,000 from an investment account and then cashed out and spent $183,000 from her investment accounts the next year.
Krusas finally filed a tax return for 2011, but it was 22 days late and came after the criminal investigation into her had already started, according to the government.
Although some people have questioned how Krusas went so long without filing a tax return before being charged, the IRS has been aware she was not filing her returns since the beginning and has collected some of the money she owes. The government’s filing says the IRS sent her a letter in 1992 and sent her more letters in at least 10 more years during the time period.
The IRS also started assessing her owed taxes, interest and penalties, which total $223,807. It’s collected about $95,000 of that debt though the years through involuntary means, according to the government.
The proposed sentencing guidelines, which U.S. District Judge Joseph Van Bokkelen must still rule on, recommend Krusas serve 12 to 18 months in prison. Federal attorneys, who agreed in a plea deal with Krusas to recommend a sentence in whatever range the guidelines suggest, are asking that she serve a prison sentence at the high end of the range.
They point out in their court filing that although tax evasion is not a public corruption crime per se, Krusas still violated the public’s trust by avoiding the tax obligations that every citizen is expected to pay.
“Public employees have a heightened duty to demonstrate the highest degree of integrity in tax matters,” the filing says. “Moreover, by not paying her fair share, Krusas was stealing from the federal government, which is a form of public corruption.”
The government also disputes any argument Krusas might make about her health or age. The crime started when Krusas was younger, the government notes, and during that time, she remained active in her private job and as a councilwoman. She took 13 trips alone in 2006 to various places across the country for council work; from 2006 through 2008, in fact, she took a total of 32 trips. She also voted on various budget and other finance proposals in the Council and served on several committees in which she had to make monetary decisions.
“Krusas’ health conditions did not impact her ability to work two jobs or make significant financial decisions,” the government’s filing says.
Krusas’ sentencing, delayed for medical reasons, is now scheduled for Oct. 29.