Brooklyn Councilman Chaim Deutsch pleaded guilty to one count of federal tax fraud on Thursday, admitting he failed to report thousands of dollars in income he made from his real estate business.

The guilty plea came as a surprise to those in his district and at the Council.

What You Need To Know

  • Thursday morning, Brooklyn Councilman Chaim Deutsch pleaded guilty to one count of federal tax fraud

  • Deutsch did not report income to the IRS from his private real estate management business between 2013 and 2015

  • Deutsch faces a year in prison
  • Deutsch will not resign his seat

“I don’t know how he himself will want to continue given he himself is pleading guilty to a very serious federal crime,” said the Council Speaker Corey Johnson.

In Manhattan federal court, Deutsch admitted to one count of filing a false tax return with the Internal Revenue Service — his 2015 return did not accurately disclose income from his real estate business.  

According to the U.S. Attorney’s office, between 2013 and 2015 Deutsch evaded approximately $82,076 dollars in taxes.

Deutsch agreed to pay it back as restitution with interest, but he still faces a steep fine and a maximum one year in prison. He will be sentenced in July. 

In a statement his attorney, Henry Mazurek, said: 

“He accepts responsibilities for his actions and intends to fully repay the $82,000 in taxes he owes. Mr. Deutsch’s dedication to public service will not be diminished, and he looks forward to completing his elected term.”

Of course, it’s going to be a term with an asterisk. 

“This tax fraud misdemeanor is incredibly troubling news,” Johnson said ahead of the Council’s meeting on Thursday. "As a result, initially we are going to remove Councilmember Deutsch from all of his committees, including as chair of the Veterans Committee as well as his role in dispersing discretionary member items." 

Because Deutsch's charge is not a felony and not directly related to his duties as a councilman, Council officials said automatic expulsion from the body isn’t triggered in this particular case. 

Deutsch did not show up to the Council’s regular meeting on Thursday, and he was nowhere to be found at his Brooklyn home or his district office. 

He is term-limited and will leave office at the end of the year no matter what. 

The Council banned almost all outside income for Council members in 2017. At the time, Deutsch was against the move. 

According to documents with the city’s Conflicts of Interest Board, in 2015, the year Deutsch filed a false return, he made somewhere between $100,000 and $250,000 on top of his Council salary as president of his real estate business, Chasa Management.