Chaim Deutsch, a member of the Brooklyn Council, is dedicated to tax fraud

Council member Chaim Deutsch. (Photo: Zainab Iqbal / Bklyner)

Chaim Deutsch, a member of the Southern Brooklyn Council, pleaded guilty today to filing an incorrect tax return regarding external income received from his real estate company.

According to Jonathan Larsen’s office, US law firm for the southern borough of New YorkAround March 2016, Deutsch filed a personal tax return for the previous year that contained fraudulent information about his income and business expenses related to Chasa Management, its property management business.

From 2013 to 2015, the law firm said, Deutsch enabled him to improperly pay taxes on his income in order to evade approximately $ 82,076 in taxes.

As of January 2017, city council members were banned from generating most external income as part of a series of reforms that also increased the salary for the position.

Deutsch pleaded guilty to filing a false tax return for the 2015 tax year and agreed to a refund of $ 82,076 plus interest. He is due to be tried on July 29 before US judge James L. Cott. The indictment provides for a maximum sentence of one year in prison.

“Chaim Deutsch, a member of New York City Council, admitted today that he cheated on the IRS in connection with his real estate business,” said US attorney Audrey Strauss in a statement announcing the request. “As an elected civil servant and community leader, Deutsch had a special responsibility to obey the law. Instead, Deutsch has withheld his true business income for a period of several years in order to avoid paying his fair share of taxes. ”

German, 52, took home about $ 130,000 a year as president of the real estate company Chasa Management.

On Thursday afternoon, city council spokesman Corey Johnson asked Deutsch to resign.

“When it comes to our work as elected officials, nothing is more important than public trust,” Johnson said in a statement. “Council member Chaim Deutsch betrayed this public trust through tax fraud. Our voters rightly expect the people they vote for to obey the law. German failed. To protect the integrity of the Brooklyn City Council and its seat, he must resign. He can no longer serve his constituents in good faith. “

A previous statement by city council spokeswoman Jennifer Fermino indicated that the city council was considering removing Deutsch from “all of its committees, including his position as Chairman of the Veterans Committee and his role in distributing discretionary funding.”

Under the State Officials Act, German may not have to resign as the misconduct is not a crime or a crime directly related to his office. And so far it does not seem to be the case that Deutsch wants to resign on his own initiative.

“Today my client is guilty of a tax offense for providing false information in a tax return,” Councilor’s attorney Henry Mazurek told Bklyner in a statement. “He accepts responsibility for his actions and intends to repay in full his tax owed of $ 82,000. Mr Deutsch’s commitment to the civil service will continue and he looks forward to completing his elected term. “

Deutsch, a Conservative Democrat whose districts include Brighton Beach, Sheepshead Bay and parts of Midwood, is already on limited term later this year, which may mitigate further efforts to remove him.

The city council voted last fall to oust Bronx Council member Andy King on charges of sexual harassment and conflicts of interest, among other things. In 2008, Queens Council member Dennis Gallagher resigned from his seat after pleading guilty of sexual abuse and violent touch.

Deutsch was first elected to his seat in 2013 and re-elected in 2017. He also ran and lost in a Congressional primary to incumbent Yvette Clarke last year.

[4/22/21 – This story has been updated to include statements from Council Member Deutsch’s attorney, City Council Speaker Corey Johnson, and Council spokesperson Jennifer Fermino.]

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