Gary council member admits not paying taxes since 1991
By Teresa Auch Schultz firstname.lastname@example.org April 1, 2013 1:08PM
Updated: May 3, 2013 6:14AM
Gary Common Councilwoman Marilyn Krusas is admitting she hid a $232,000 inheritance from the IRS in order to not pay the more than $157,000 she owed because she hadn’t filed an income tax return since 1991.
According to the plea agreement, filed Monday in the U.S. District Court in Hammond, Krusas faces up to five years in prison, although federal prosecutors agree to not recommend more than what federal sentencing guidelines recommend, which will be determined later.
Krusas was charged last fall with one count of tax evasion. Federal attorneys claimed that she hadn’t filed a return for more than two decades and had repeatedly ignored letters from the IRS. The government has assessed her four times since 1997 for a total of $157,413.
She then received the inheritance in 2009, but instead of using it to pay her taxes, she took steps to hide the money from the government, including sending about $50,000 of it to a relative, keeping $60,000 of it in cashiers checks and using more of it to pay off other debts, including her mortgage.
The agreement says that whatever is left of the inheritance, which is now in the possession of her attorney, Scott King, will go to the IRS.
A change of plea hearing had not been set as of Monday afternoon.
If the judge accepts Krusas’ plea, her first-district seat on Gary’s Common Council -- and the $28,600 annual salary -- will be vacated, according to Indiana State Code.
“The conviction becomes valid, and then (Democratic Party Chairman) Tom McDermott Jr. will call a caucus of Gary precinct committeemen within 30 days (of the conviction) to fill the seat,” said Council President Kyle Allen. McDermott didn’t return a call for comment.
For his part, Allen remained stunned at the news.
“I hate to see this happen, and I wish her the best,” Allen said.
Correspondent Michelle L. Quinn contributed to this story.