UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UNITED STATES OF AMERICA
v.
EDWARD R. VRDOLYAK

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No. 15 CR 314
Judge Robert M. Dow, Jr.

PLEA AGREEMENT
1.

This Plea Agreement between the United States Attorney for the Northern District of

Illinois, JOHN R. LAUSCH, JR., and defendant EDWARD R. VRDOLYAK, and his attorney,
MICHAEL MONICO, is made pursuant to Rule 11 of the Federal Rules of Criminal Procedure and
is governed in part by Rule 11(c)(1)(A), as more fully set forth below. The parties to this Agreement
have agreed upon the following:
Charges in This Case
2.

The superseding indictment in this case charges defendant with obstructing and

impeding the administration of the Internal Revenue Code, in violation of Title 26, United States
Code, Section 7212 (Count One), and tax evasion, in violation of Title 26, United States Code,
Section 7201 (Count Two).
3.

Defendant has read the charges against him contained in the superseding indictment,

and those charges have been fully explained to him by his attorney.
4.

Defendant fully understands the nature and elements of the crimes with which he has

been charged.
Charge to Which Defendant Is Pleading Guilty

 5.

By this Plea Agreement, defendant agrees to enter a voluntary plea of guilty to the

following count of the superseding indictment: Count Two, which charges defendant with tax
evasion, in violation of Title 26, United States Code, Section 7201.
Factual Basis
6.

Defendant will plead guilty because he is in fact guilty of the charge contained in

Count Two of the superseding indictment. In pleading guilty, defendant admits the following facts
and that those facts establish his guilt beyond a reasonable doubt:
Beginning no later than approximately 2003 and continuing through in or around 2015, in the
Northern District of Illinois, Eastern Division, and elsewhere, defendant EDWARD R.
VRDOLYAK, together with Daniel P. Soso and other persons known and unknown to the Grand
Jury, did willfully attempt to evade and defeat the payment of income tax due and owing by Soso to
the United States for the calendar years 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002,
2003, 2004, 2008, 2009, 2010, 2011, 2012, and 2013, in violation of Title 26, United States Code,
Section 7201 and Title 18, United States Code, Section 2.
On or about October 9, 1996, the Attorney General for the State of Illinois entered into a
written contract with several law firms, including Law Firm B. Pursuant to these contracts, members
of these law firms were to be appointed by the Attorney General to act as Special Assistant Attorneys
General who would represent the State of Illinois in its anticipated lawsuit against certain tobacco
companies to recover, among other things, money damages incurred by the State of Illinois as a result
of the sale of tobacco products to residents of the State of Illinois. In addition, the contracts provided
that the law firms representing the State of Illinois, including Law Firm B, would share a “contingent
fee” equal to ten percent of the total monetary recovery realized by the State of Illinois in its planned
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 lawsuit.
Individual B, a partner in Law Firm B, VRDOLYAK and Soso entered into additional
agreements, including the 10/08/96 Agreement and the 05/24/99 Agreement, to pay VRDOLYAK
and Soso a portion of the attorney fees to be awarded in this lawsuit.
In order to collect amounts due and owing from a taxpayer who failed to pay amounts due to
the IRS, the IRS was permitted to serve a notice of levy on other individuals. An individual receiving
a notice of levy was required to turn over to the IRS any income of the non-paying taxpayer in their
possession or for which they were obligated.
VRDOLYAK acknowledges that, beginning no later than 1993, Soso failed to pay income
tax due and owing to the IRS, and the IRS initiated efforts to collect amounts owed by Soso by
making demands for payment to Soso, serving notices of levy, filing federal tax liens against Soso
and obtaining information from Soso about his sources of income.
Beginning no later than in or around 2000 and continuing until in or around August 2005,
VRDOLYAK made payments totaling approximately $1,925,830 to Soso for amounts due to Soso
under the 10/08/96 Agreement and the 05/24/99 Agreement, as Soso’s share of the fees of the tobacco
litigation.
On or about August 6, 2005, The Law Offices of Edward R. Vrdolyak was served with an
IRS notice of levy which required the turnover of all salary, wages and other amounts owed to Soso.
On or about November 22, 2005, after conferring with VRDOLYAK, the CFO of Law Firm A
prepared and sent a response to an IRS revenue officer that stated neither VRDOLYAK nor Law
Firm A had any amounts owing to Soso and that VRDOLYAK intended to honor the levy and send
any future funds due Soso to the IRS. VRDOLYAK knew at the time the response was sent that if
VRDOLYAK received money from Law Firm B under the 10/08/96 and 05/24/99 Agreements,
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 VRDOLYAK owed money to Soso.
Beginning no later than in or around August 2005 and continuing through in or around 2007,
VRDOLYAK and/or Law Firm A received at least approximately $262,854.83 due Soso. In so
doing, VRDOLYAK concealed receipt of these funds as amounts due to Soso from the IRS knowing
such concealment would assist Soso in evading the payment of taxes and assessments due the IRS.
From in or around 2010 and continuing through in or around 2011, after receiving the August
6, 2005 IRS levy, Soso and VRDOLYAK entered negotiations regarding amounts VRDOLYAK
received that were due and owing Soso. Pursuant to these negotiations, VRDOLYAK caused
approximately $170,242 in funds due to Soso to be paid to Soso instead of remitting these funds to
the IRS.
The defendant agrees that a federal tax loss of at least $244,096.67 resulted from the offense
but reserves the right to dispute the amount of penalties and interest owed and whether those amounts
should be included in the loss calculation below.
Maximum Statutory Penalties
7.

Defendant understands that the charge to which he is pleading guilty carries the

following statutory penalties:
a.

A maximum sentence of 5 years’ imprisonment. This offense also carries a maximum

fine of $100,000, or twice the gross gain or gross loss resulting from that offense, whichever is
greater. Defendant further understands that the Court must order costs of prosecution, estimated not
to exceed $500. Defendant further understands that the judge also may impose a term of supervised
release of not more than three years.
b.

Pursuant to Title 18, United States Code, Section 3013, defendant will be assessed
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 $100 on the charge to which he has pled guilty, in addition to any other penalty or restitution imposed.
Sentencing Guidelines Calculations
8.

Defendant understands that in determining a sentence, the Court is obligated to

calculate the applicable Sentencing Guidelines range, and to consider that range, possible departures
under the Sentencing Guidelines, and other sentencing factors under 18 U.S.C. § 3553(a), which
include: (i) the nature and circumstances of the offense and the history and characteristics of the
defendant; (ii) the need for the sentence imposed to reflect the seriousness of the offense, promote
respect for the law, and provide just punishment for the offense, afford adequate deterrence to
criminal conduct, protect the public from further crimes of the defendant, and provide the defendant
with needed educational or vocational training, medical care, or other correctional treatment in the
most effective manner; (iii) the kinds of sentences available; (iv) the need to avoid unwarranted
sentence disparities among defendants with similar records who have been found guilty of similar
conduct; and (v) the need to provide restitution to any victim of the offense.

9.

For purposes of calculating the Sentencing Guidelines, the parties agree on the

following points:
a.

Applicable Guidelines. The Sentencing Guidelines to be considered in this

case are those in effect at the time of sentencing. The following statements regarding the calculation
of the Sentencing Guidelines are based on the Guidelines Manual currently in effect, namely the
November 2018 Guidelines Manual.
b.

Offense Level Calculations.
i.

Pursuant to Guideline §§ 2T1.1 and 2T4.1, the offense level is
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 calculated with reference to the corresponding tax loss. It is the government’s position that the tax
loss caused by the offense was more than $250,000, but not more than $550,000, resulting in a base
offense level of 18. The defendant reserves the right to argue the amount of tax loss at sentencing.
ii.

If the Court determines at the time of sentencing that defendant has

clearly demonstrated a recognition and affirmative acceptance of personal responsibility for his
criminal conduct within the meaning of Guideline § 3E1.1(a), including by furnishing the United
States Attorney’s Office and the Probation Office with all requested financial information relevant
to his ability to satisfy any fine that may be imposed in this case, a two-level reduction in the offense
level will be appropriate. Defendant understands that the government will reserve making a
determination of whether the defendant has accepted responsibility within the meaning of Guideline
§ 3E1.1(a), until after considering the positions taken by the defendant at sentencing.

iii.

In accord with Guideline § 3E1.1(b), defendant has timely notified the

government of his intention to enter a plea of guilty, thereby permitting the government to avoid
preparing for trial and permitting the Court to allocate its resources efficiently. Therefore, as provided
by Guideline § 3E1.1(b), if the Court determines the offense level to be 16 or greater prior to
determining that defendant is entitled to a two-level reduction for acceptance of responsibility, the
government will move for an additional one-level reduction in the offense level.
c.

Criminal History Category. With regard to determining defendant’s criminal

history points and criminal history category, based on the facts now known to the government, it is
the government’s position that defendant’s criminal history points equal 4 and defendant’s criminal
history category is III. Defendant disagrees and it is the defendant’s position that his criminal history
points equal 2 and that his criminal history category is II:
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 i.

On or about October 15, 2010, defendant was convicted of conspiring

to participate in a scheme to defraud in violation of Title 18, United States Code, Section 371, in the
United States District Court for the Northern District of Illinois and was sentenced to 10 months in
prison, a term of supervised release of three years, and a fine of $250,000. Pursuant to Guideline §
4A1.1(b), the defendant receives 2 criminal history points for this sentence.
ii.

It is the government’s position that the instant offense continued while

under a criminal justice sentence, including imprisonment and supervised release and that pursuant
to Guideline § 4A1.1(d), the defendant receives 2 criminal history points. The defendant reserves
the right to argue otherwise.
d.

Anticipated Advisory Sentencing Guidelines Range. Therefore, based on

the facts now known to the government, it is the government’s position that if the Court determines
the defendant has accepted responsibility, the defendant’s anticipated offense level is 15, which,
when combined with the anticipated criminal history category of III, results in an anticipated advisory
sentencing guidelines range of 24 to 30 months’ imprisonment, in addition to any supervised release,
fine, and restitution the Court may impose. Defendant reserves the right to argue an alternative
guideline calculation.
10.

Defendant and his attorney and the government acknowledge that the above

guidelines calculations are preliminary in nature and are non-binding predictions upon which neither
party is entitled to rely. Defendant understands that further review of the facts or applicable legal
principles may lead the government to conclude that different or additional guidelines provisions
apply in this case. Defendant understands that the Probation Office will conduct its own investigation
and that the Court ultimately determines the facts and law relevant to sentencing, and that the Court’s
determinations govern the final guideline calculation. Accordingly, the validity of this Agreement is
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 not contingent upon the probation officer’s or the Court’s concurrence with the above calculations,
and defendant shall not have a right to withdraw his plea on the basis of the Court’s rejection of these
calculations. Both parties expressly acknowledge that this Agreement is not governed by Fed. R.
Crim. P. 11(c)(1)(B), and that errors in applying or interpreting any of the sentencing guidelines may
be corrected by either party prior to sentencing. The parties may correct these errors either by
stipulation or by a statement to the Probation Office or the Court, setting forth the disagreement
regarding the applicable provisions of the guidelines. The validity of this Agreement will not be
affected by such corrections, and defendant shall not have a right to withdraw his plea, nor the
government the right to vacate this Agreement, on the basis of such corrections.
Agreements Relating to Sentencing
11.

Each party is free to recommend whatever sentence it deems appropriate.

12.

It is understood by the parties that the sentencing judge is neither a party to nor bound

by this Agreement and may impose a sentence up to the maximum penalties as set forth above.
Defendant further acknowledges that if the Court does not accept the sentencing recommendation of
the parties, defendant will have no right to withdraw his guilty plea.
13.

Regarding restitution, defendant agrees to pay restitution to the United States

Treasury, arising from the offense conduct set forth above, totaling at least $244,096.97 plus penalties
and interest to be determined, pursuant to Title 18, United States Code, Sections 3663(a)(3) and 3664.
It is the Government’s position that the total amount of restitution due to the IRS is greater than
$250,000, and that such amount, which will be determined at or before the time of sentencing, should
be credited to Daniel P. Soso’s Form 1040 amount due, beginning with tax year 1993 until such
restitution amount is exhausted, as follows:

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 Tax Year
1993
1994
1995
1996
1997
1999
2000
2001
2002
14.

Amount
$24,319.00
$11,919.64
$5,469.62
$41,805.89
$19,611.35
$16,989.30
$141,148.91
$104,195.65
$82,175.40

Restitution shall be due immediately and paid pursuant to a schedule to be set by the

Court at sentencing. Defendant acknowledges that pursuant to Title 18, United States Code, Section
3664(k), he is required to notify the Court and the United States Attorney’s Office of any material
change in economic circumstances that might affect his ability to pay restitution.
15.

Defendant agrees to pay the special assessment of $100 at the time of sentencing with

a cashier’s check or money order payable to the Clerk of the U.S. District Court.
16.

Defendant agrees that the United States may enforce collection of any fine or

restitution imposed in this case pursuant to Title 18, United States Code, Sections 3572, 3613, and
3664(m).
17.

After sentence has been imposed on the count to which defendant pleads guilty as

agreed herein, the government will move to dismiss the remaining count of the superseding
indictment as to defendant.

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 Acknowledgments and Waivers Regarding Plea of Guilty
Nature of Agreement
18.

This Agreement is entirely voluntary and represents the entire agreement between the

United States Attorney and defendant regarding defendant’s criminal liability in case 15 CR 314.
19.

This Agreement concerns criminal liability only. Except as expressly set forth in this

Agreement, nothing herein shall constitute a limitation, waiver, or release by the United States or any
of its agencies of any administrative or judicial civil claim, demand, or cause of action it may have
against defendant or any other person or entity. The obligations of this Agreement are limited to the
United States Attorney’s Office for the Northern District of Illinois and cannot bind any other federal,
state, or local prosecuting, administrative, or regulatory authorities, except as expressly set forth in
this Agreement.
20.

Defendant understands that nothing in this Agreement shall limit the Internal Revenue

Service in its collection of any taxes, interest or penalties from defendant and his spouse or
defendant’s partnership or corporations. Defendant understands that the amount of tax as calculated
by the IRS may exceed the amount of tax due as calculated for the criminal case.
Waiver of Rights
21.

Defendant understands that by pleading guilty he surrenders certain rights, including

the following:
a.

Trial rights. Defendant has the right to persist in a plea of not guilty to the

charges against him, and if he does, he would have the right to a public and speedy trial.
i.

The trial could be either a jury trial or a trial by the judge sitting without

a jury. However, in order that the trial be conducted by the judge sitting without a jury, defendant,
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 the government, and the judge all must agree that the trial be conducted by the judge without a jury.
ii.

If the trial is a jury trial, the jury would be composed of twelve citizens

from the district, selected at random. Defendant and his attorney would participate in choosing the
jury by requesting that the Court remove prospective jurors for cause where actual bias or other
disqualification is shown, or by removing prospective jurors without cause by exercising peremptory
challenges.
iii.

If the trial is a jury trial, the jury would be instructed that defendant is

presumed innocent, that the government has the burden of proving defendant guilty beyond a
reasonable doubt, and that the jury could not convict him unless, after hearing all the evidence, it was
persuaded of his guilt beyond a reasonable doubt and that it was to consider each count of the
superseding indictment separately. The jury would have to agree unanimously as to each count before
it could return a verdict of guilty or not guilty as to that count.
iv.

If the trial is held by the judge without a jury, the judge would find the

facts and determine, after hearing all the evidence, and considering each count separately, whether
or not the judge was persuaded that the government had established defendant’s guilt beyond a
reasonable doubt.
v.

At a trial, whether by a jury or a judge, the government would be

required to present its witnesses and other evidence against defendant. Defendant would be able to
confront those government witnesses and his attorney would be able to cross-examine them.
vi.

At a trial, defendant could present witnesses and other evidence in his

own behalf. If the witnesses for defendant would not appear voluntarily, he could require their
attendance through the subpoena power of the Court. A defendant is not required to present any
evidence.
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 vii.

At a trial, defendant would have a privilege against self- incrimination

so that he could decline to testify, and no inference of guilt could be drawn from his refusal to testify.
If defendant desired to do so, he could testify in his own behalf.
b.

Appellate rights. Defendant further understands he is waiving all appellate

issues that might have been available if he had exercised his right to trial, and may only appeal the
validity of this plea of guilty and the sentence imposed. Defendant understands that any appeal must
be filed within 14 calendar days of the entry of the judgment of conviction.
22.

Defendant understands that by pleading guilty he is waiving all the rights set forth in

the prior paragraphs, with the exception of the appellate rights specifically preserved above.
Defendant’s attorney has explained those rights to him, and the consequences of his waiver of those
rights.
Presentence Investigation Report/Post-Sentence Supervision
23.

Defendant understands that the United States Attorney’s Office in its submission to

the Probation Office as part of the Pre-Sentence Report and at sentencing shall fully apprise the
District Court and the Probation Office of the nature, scope, and extent of defendant’s conduct
regarding the charges against him, and related matters. The government will make known all matters
in aggravation and mitigation relevant to sentencing.
24.

Defendant agrees to truthfully and completely execute a Financial Statement (with

supporting documentation) prior to sentencing, to be provided to and shared among the Court, the
Probation Office, and the United States Attorney’s Office regarding all details of his financial
circumstances, including his recent income tax returns as specified by the probation officer.
Defendant understands that providing false or incomplete information, or refusing to provide this
information, may be used as a basis for denial of a reduction for acceptance of responsibility pursuant
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 to Guideline § 3E1.1 and enhancement of his sentence for obstruction of justice under Guideline §
3C1.1, and may be prosecuted as a violation of Title 18, United States Code, Section 1001 or as a
contempt of the Court.
25.

For the purpose of monitoring defendant’s compliance with his obligations to pay a

fine and restitution during any term of supervised release or probation to which defendant is
sentenced, defendant further consents to the disclosure by the IRS to the Probation Office and the
United States Attorney’s Office of defendant’s individual income tax returns (together with
extensions, correspondence, and other tax information) filed subsequent to defendant’s sentencing,
to and including the final year of any period of supervised release or probation to which defendant is
sentenced. Defendant also agrees that a certified copy of this Agreement shall be sufficient evidence
of defendant’s request to the IRS to disclose the returns and return information, as provided for in
Title 26, United States Code, Section 6103(b).
Other Terms
26.

Defendant agrees to cooperate with the United States Attorney’s Office in collecting

any unpaid fine and restitution for which defendant is liable, including providing financial statements
and supporting records as requested by the United States Attorney’s Office.
27.

Defendant will not object to a motion brought by the United States Attorney’s Office

for the entry of an order authorizing disclosure of documents, testimony and related investigative
materials which may constitute grand jury material, preliminary to or in connection with any
judicial proceeding,

pursuant to Fed. R. Crim. P. 6(e)(3)(E)(i). In addition, defendant will not

object to the government’s solicitation of consent from third parties who provided records or other
materials to the grand jury pursuant to grand jury subpoenas, to turn those materials over to the Civil
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 Division of the United States Attorney’s Office, or an appropriate federal or state agency (including
but not limited to the Internal Revenue Service), for use in civil or administrative proceedings or
investigations, rather than returning them to the third parties for later summons or subpoena in
connection with a civil or administrative proceeding involving, or investigation of, defendant and his
spouse or defendant’s partnerships or corporations. Nothing in this paragraph or the preceding
paragraph precludes defendant and his spouse or defendant’s partnerships or corporations from
asserting any legal or factual defense to taxes, interest, and penalties that may be assessed by the IRS.
28.

Defendant understands that, if convicted, a defendant who is not a United States

citizen may be removed from the United States, denied citizenship, and denied admission to the
United States in the future.
Conclusion
29.

Defendant understands that this Agreement will be filed with the Court, will become

a matter of public record, and may be disclosed to any person.
30.

Defendant understands that his compliance with each part of this Agreement extends

throughout the period of his sentence, and failure to abide by any term of the Agreement is a violation
of the Agreement. Defendant further understands that in the event he violates this Agreement, the
government, at its option, may move to vacate the Agreement, rendering it null and void, and
thereafter prosecute defendant not subject to any of the limits set forth in this Agreement, or may
move to resentence defendant or require defendant’s specific performance of this Agreement.
Defendant understands and agrees that in the event that the Court permits defendant to withdraw
from this Agreement, or defendant breaches any of its terms and the government elects to void the
Agreement and prosecute defendant, any prosecutions that are not time- barred by the applicable
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 statute of limitations on the date of the signing of this Agreement may be commenced against
defendant in accordance with this paragraph, notwithstanding the expiration of the statute of
limitations between the signing of this Agreement and the commencement of such prosecutions.
31.

Should the judge refuse to accept defendant’s plea of guilty, this Agreement shall

become null and void and neither party will be bound to it.
32.

Defendant and his attorney acknowledge that no threats, promises, or representations

have been made, nor agreements reached, other than those set forth in this Agreement, to cause
defendant to plead guilty. Defendant acknowledges that he has read this Agreement and carefully
reviewed each provision with his attorney. Defendant further acknowledges that he understands and
voluntarily accepts each and every term and condition of this Agreement.
AGREED THIS DATE:

JOHN R. LAUSCH, JR.
United States Attorney

EDWARD R. VRDOLYAK
Defendant

AMARJEET S. BHACHU
Assistant U.S. Attorney

MICHAEL MONICO
Attorney for Defendant

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