Former state legislator Annazette Collins was sentenced to a year in federal prison Friday in a tax fraud case the judge called an “egregious” effort to avoid paying her fair share, followed up by “veiled denials and blame-shifting.”
In denying a defense request for probation, U.S. District Judge Jorge Alonso also noted that during her 12 years in the Illinois General Assembly, Collins sponsored legislation to increase taxes on the people of Illinois.
“That is a fact that is reprehensible, because after seeking to increase the tax burden on Illinoisans, she flagrantly cheated and lied on her tax forms to avoid paying her fair share,” Alonso said near the end of the more than three-hour hearing.
Alonso said the defense arguments that Collins was in over her head and trusted her accountants to accurately file her returns didn’t hold water, particularly given she’s a self-made businesswoman and veteran politician who clearly knew better.
The judge also had stern words for her attorney’s argument that she simply couldn’t pay her taxes, noting that the trial evidence showed she was driving luxury cars, owned two homes, and sent her daughter to an expensive summer camp at Sea World in California.
“In this case, her offenses were driven by greed,” Alonso said. “She doesn’t want to hear that, but that is the truth. …Spending the money that you owe does not equal not being able to pay.”
Dressed in a floral-print blouse, Collins, 62, scribbled notes on a legal pad and took a deep breath as the sentence was announced, but showed no other visible reaction.
Moments earlier, Collins had made a short statement to the court thanking her friends and family “that have stood by me through this whole ordeal,” but did not address her conviction or apologize. About three dozen relatives and other supporters were watching from the courtroom gallery.
A federal jury convicted Collins in February of filing two false tax returns and failing to file one personal tax return and a return for her lobbying firm. She was acquitted of failing to file a corporate return in 2016 and also of filing a false tax return for herself in 2018.
In addition to the prison term, Collins was also ordered to pay $110,000 in restitution.
The charges against Collins, a longtime state representative before being appointed to fill a senate vacancy in 2011, stemmed from the sprawling federal investigation of former Illinois House Speaker Michael Madigan and his once-vaunted political operation.
When Collins was indicted in 2021, federal authorities were closing in on Madigan, charging a string of ex-lawmakers and lobbyists with ties to the then-powerful speaker and ComEd, which was Collins’ biggest lobbying client.
Collins’ name has surfaced in a number of recent corruption trials, including the “ComEd Four” trial last year, when she turned up on a so-called magic list of Madigan-approved lobbyists found during a raid of longtime Madigan confidant Michael McClain’s home in downstate Quincy.
According to testimony in Collins’ trial, from 2014 to 2018, she was paid more than $200,000 by ComEd for lobbying and consulting services. She was also paid thousands as a contract lobbyist by consulting firms run by staunch Madigan allies: Cullen Inc., run by Thomas Cullen, a former top Madigan staffer and longtime political strategist; and Roosevelt Group, headed by Democratic political operative Victor Reyes.
During the trial, prosecutors displayed for jurors consulting contracts showing AT&T paid Collins nearly $100,000 from 2015 to 2018. They were signed by then-AT&T Illinois President Paul La Schiazza, who is charged separately with trying to corruptly influence Madigan by hiring Collins’ former colleague, ex-state Rep. Edward Acevedo, as a consultant.
Testimony also showed Collins was paid $11,000 for consulting services by Rekooh Management. Though the owner of that firm was not brought up, records show it is ex-ComEd executive John Hooker, who was convicted in the “ComEd Four” trial in the scheme to bribe Madigan.
The charges against Collins, who represented Chicago’s West Side as both a state representative and senator, focused largely on income from her successful lobbying and consulting firm, Kourtnie Nicole Corp., which she formed after leaving the legislature in 2013.
Between 2014 and 2018, Collins starkly underreported her lobbying income on tax returns, including one year showing she’d made less than $12,000 when her firm actually had about $120,000 in gross receipts, according to prosecutors.
In 2018, Collins had her tax preparer augment her business travel expenses to $25,000 when most of her travel spending that year was actually for personal vacations to Jamaica and Mexico, according to testimony. The false report meant the IRS actually sent Collins a check for more than $2,000, even though she’d paid no taxes into the system that year.
Collins also failed to file a personal return in 2016 and filed no corporate income tax return for her firm in 2015 or 2016, even though the company was annually making six figures, according to prosecutors.
In asking Friday for a sentence of about two years in prison, Assistant U.S. Attorney Michelle Parthum said that Collins has a long “history of recidivism” when it comes to trying to get out of paying taxes, including when the IRS first confronted her about underreported income from her job as an insurance broker a decade ago. Instead of owning up, Parthum said, Collins decided to fudge the numbers.
“When the IRS caught her, she didn’t try to make it right, she tried to lie,” Parthum said.
Parthum also presented evidence Friday of a separate, uncharged fraud scheme where Collins was caught filing bogus insurance policies for customers at American Income Life Insurance who either didn’t ask for them or did not exist, funneling more than $10,000 in advance commissions into bank accounts belonging to relatives.
The judge was shown emails where an insurance investigator at AIL said he confronted Collins about the discrepancies and “accused her of being thief and got no reaction from her.” The investigator said she answered every question with “I don’t know,” and refused to provide a statement in response to the allegations.
Collins was fired “for cause” from the company in 2014.
Collins’ attorney, Shay Allen, argued for probation, saying Collins was a decent person devoted to her family and friends, but got tripped up when it came to taxes, which he described as “a confusing and blurry area of our lives.”
Allen pushed back on the notion Collins was living a lavish lifestyle, saying most of it was paid for with credit cards.
“That’s not a lavish lifestyle, that is the lifestyle of someone who is under water,” Allen said. “That’s not the lifestyle not someone who has piles a money in the closet, it’s the lifestyle of someone who is struggling to get by.”
Collins was ordered to report to prison by Sept. 9.
She’s among a growing list of former members of the Illinois General Assembly to be sentenced to federal time over the past five years, including former state Sen. Thomas Cullerton, ex-state Reps. Luis Arroyo and Acevedo, the former state representative who, like Collins, was convicted of tax charges stemming from the Madigan probe.
Another former state senator, Terry Link, was recently sentenced to probation. Criminal charges are still pending against Madigan as well as current state Sen. Emil Jones III.
jmeisner@chicagotribune.com