The former tax preparer for reality television star Michael “The Situation” Sorrentino and his brother, Marc Sorrentino, has pleaded guilty to filing fraudulent tax returns for the pair.
Gregg Mark, who had been an accountant at a Staten Island, New York-based accounting firm, admitted that he prepared fraudulent tax returns for the Sorrentinos for the 2010 and 2011 tax years. Mark has admitted that the returns defrauded the Internal Revenue Service (IRS) out of between $550,000 and $1.5 million.
Mark pleaded guilty in a Newark federal court on information charging him with one count of conspiracy to defraud the United States. When charges are brought on information, it generally means that the defendant has accepted the charges and is cooperating with the investigation. That could be bad news for the Sorrentinos.
In September of 2014, Michael (Mike) Sorrentino, who made a name for himself on MTV’s Jersey Shore, pleaded not guilty to charges that he avoided paying taxes on $8.9 million. He was charged with one count of conspiracy to defraud the United States; two counts of filing false tax returns for 2010 through 2012; and one count for allegedly failing to file a tax return for 2011. Mike’s brother, Marc, was charged with one count of conspiracy and three counts of filing false tax returns.
Failure to file a tax return is exactly what it sounds like. The conspiracy charges are a little more complicated. According to the indictment, the feds allege that Mike and his brother, Marc (who is also Mike’s manager) used two companies they controlled, MPS Entertainment, LLC and Situation Nation, Inc., to evade taxation. Both of the companies were set up as S corporations which means that they were passthrough entities: the income and expenses were meant to pass through to the shareholders who were, you guessed it, Mike and Marc. As part of the conspiracy, it’s alleged that the brothers took money out of the companies for personal expenses like “high-end vehicles, purchases of high-end clothing, and personal grooming expenses” but claimed that they were legitimate business expenses. They allegedly also deliberately understated the amount of income received by the companies to their accountants who then passed through the lower-income amounts to be reported on individual returns. For at least one of those years (2011), the feds say that the income was passed through… and passed over. Mike allegedly failed to file a personal tax return in 2011, despite earning nearly $2 million that year. In total, the Sorrentinos are accused of failing to pay tax on nearly $9 million.
A trial date has not yet been set for the brothers. However, this latest move by their accountant could make their own defense more difficult. I wouldn’t be surprised to see the pair take a plea, a la the Real Housewives’ Joe and Teresa Giudice, in order to reduce potential jail time. As it currently stands, both Mike and Marc could face years in prison and heavy fines. The conspiracy count carries up to five years in prison and a $250,000 fine; filing a false tax return carries a maximum potential penalty of three years in prison and a $250,000 fine for each count; and failing to file a tax return carries up to one year in prison and a $100,000 fine.
At sentencing, the Sorrentinos’ former accountant, Mark, faces up to five years in prison and a $250,000 fine. His sentencing is scheduled for March 24, 2016.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to the guilty plea.
