New York City Councilman Chaim Deutsch pleaded guilty Thursday to dodging more than $82,000 in federal taxes on income he earned from his real estate management company, prosecutors announced.
The Brooklyn lawmaker admitted he failed to account for the income from his firm, Chasa Management, Inc., on his 2015 federal tax statement, prosecutors said.
“As an elected official and community leader, Deutsch had a particular responsibility to follow the law,” said Manhattan U.S. Attorney Audrey Strauss. “Instead, over a multi-year period, Deutsch concealed his true business income to avoid paying his fair share of taxes.”
Deutsch faces up to a year in prison and a fine of $100,000 when he is sentenced on July 29 on a single count of filing a false tax return. He has agreed to pay back the $82,000 restitution plus interest.
City Council Speaker Corey Johnson said Deutsch will be immediately stripped of his committee assignments. He will be barred from doling out so-called member items, which are discretionary grants to community groups and projects.
“No one is above the law, not even a council member,” said Johnson at an unrelated press conference Thursday, adding that he had just been notified about the plea. “If what I’m reading is correct, it’s incredibly troubling news.”
Under Council rules, Deutsch won’t be automatically expelled. But Johnson made it clear that he hopes the Brooklyn lawmaker steps down.
“I don’t know how he would want to continue given that he is pleading guilty to a very serious federal crime,” Johnson said.
Deutsch, 52, has served in the City Council since 2014, and represents the Brooklyn neighborhoods of Brighton Beach, Gerritsen Beach, Gravesend, Manhattan Beach, Marine Park, Midwood, Plum Beach and Sheepshead Bay.
His lawyer, Henry Mazurek, said in a statement that Deutsch intends to complete his term in office. He is barred from running for reelection due to term limits.
“Today, my client pled guilty to a one-count misdemeanor tax offense of making false statements on a tax return,” Mazurek said. “Mr. Deutsch’s dedication to public service will not be diminished, and he looked forward to completing his elected term.”
City Council members were barred from earning almost all outside income in 2017 as part of a compromise with Mayor de Blasio that significantly boosted their salaries.
Deutsch voted against the law and said at the time that he was considering keeping the real estate management company in business so he could return to work there after leaving office.