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Monday, March 4, 2024

Opening statements made in Annazette Collins trial

When longtime state legislator Annazette Collins left office a decade ago, she went through a revolving door that’s practically a tradition in Illinois, forming a lobbying and consulting firm that helped major companies like AT&T and ComEd gain traction with her former colleagues in the General Assembly.

Like many politicians who traveled the same well-worn path, Collins did very well. In the first year, her firm pulled in $90,000 in receipts, a figure that had more than doubled by 2016, federal prosecutors say.

In addition to paying herself a salary, Collins used her firm’s funds to pay for personal expenses like her mortgage, gym membership, daycare, and private school tuition for her daughter, according to prosecutors.

But when it came time to file her federal income taxes, Collins’ company, Kourtnie Nicole Corp., suddenly looked far less lucrative, prosecutors said in opening statements in Collins’ tax fraud case Tuesday.

Between 2014 and 2018, Collins vastly underreported her income on tax returns, including one return showing she’d made as little as $11,500, according to prosecutors. She 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 all, prosecutors allege, Collins avoided paying $99,800 in federal taxes over the five-year period in the indictment.

“(Collins) was a former Illinois state senator and representative who for years had been trusted with making the laws of the state of Illinois,” Assistant U.S. Attorney Michelle Parthum said in her opening statement. “But when the time came for her to follow the law…she chose not to.”

Collins, 61, who represented Chicago’s West Side before losing in the Democratic primary in 2012, is charged with three counts of filing a false individual income tax return, two counts of failing to file a corporate income tax return, and one count of willfully failing to file an individual income tax return. The most serious charges carry up to three years in prison.

In his opening remarks Tuesday, Collins’ attorney, Shay Allen, described his client not as some sophisticated ex-lawmaker but as an everyday wife, mother, and colleague who is a “hard-working citizen of this country.”

He said like most people clueless about tax laws, Collins placed her trust in a pair of accounting experts to file accurate returns, and that any discrepancies or failures to file rest at their feet.

“The government expects you to believe that Ms. Collins willfully shafted the government out of a hundred thousand dollars,” Allen said. “This isn’t some large, overarching scam or scheme that Ms. Collins was a part of. This was bad accounting.”

Pointing to the prosecution table stacked with folders full of documents, Allen said the government’s strategy was to “wheel in big carts of stuff and say look at this paper, look at that document.” But it’s not going to prove anything, he said.

“It’s gonna prove they have damn good copiers,” Allen said sarcastically. “It’s gonna prove they don’t care much about the environment.”

Collins was indicted in 2021 amid the sprawling investigation into an alleged scheme by ComEd to bribe then-House Speaker Michael Madigan.

The charges came as federal authorities were closing in on Madigan, indicting a string of ex-lawmakers and lobbyists with ties to the then-powerful speaker and ComEd, including Collins’ former colleague, ex-state Rep. Edward Acevedo and his two sons, who were convicted on tax-related counts stemming from their lobbying business.

Madigan himself was indicted a year later on racketeering charges alleging his elected office and political operation were a criminal enterprise that provided personal financial rewards for him and his associates, including through bribery schemes arranged by ComEd and AT&T.

Also charged was Madigan’s longtime confidant, Michael McClain. Their trial is set for October.

Collins’ case, meanwhile, will be decidedly more dry, as the jury is not expected to hear any evidence of the Madigan probe. U.S. District Judge Jorge Alonso told the jury they could get the case as soon as Friday.

In addition to her income as a lobbyist, Collins also failed to report nearly $100,000 she had separately earned as an agent for American Income Life Insurance Co., according to prosecutors.

After discovering the omitted income in 2016, the IRS hit Collins with $26,000 in assessments and penalties. She entered into a payment plan but stopped making payments, and currently owes more than the original assessment, prosecutors say.

Prosecutors allege that Collins filed an amended return that claimed nearly 23,000 miles in business-related travel and $50,000 in alleged expenses for her job as an insurance agent, including nearly $8,000 for “work clothes,” $1,000 for “cleaning of work clothes,” and nearly $9,000 for “repairs and maintenance.”

Collins was fired from her insurance job “for cause” in September 2014, but the specific reason for being let go has not been made public.

Collins was a longtime state representative before being appointed to fill a vacancy in 2011 left by state Sen. Rickey Hendon’s abrupt resignation.

Records show Collins registered as a contract lobbyist for ComEd in 2014, a year after she left office. Her last year registered for the utility was in 2019, when news of the federal bribery probe began to surface.

She collects an annual state pension of about $40,000, records show.

 

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