Mike "The Situation" Sorrentino knows how quickly life can change.
On December 3, 2009, more than a million viewers tuned into
In less than a year, Snooki, JWoww and the rest of the cast had become bona fide reality television stars but perhaps none of them moreso than Sorrentino. Bent on stretching his 15 minutes into... well, something else, Sorrentino amped up his persona and filled his bank account by making paid appearances at nightclubs and bars, endorsing products ranging from vodka to vitamin supplements (because, of course, those two go together) and guesting on other reality television shows like Dancing With The Stars (in the same season as Bristol Palin, David Hasselhoff and Kurt Warner). Sorrentino managed to parlay what felt like a caricature as "The Situation" into money, allegedly raking in nearly $9 million in income for his efforts over three years. It seemed like the whole world was watching him, including, as it turns out, the Internal Revenue Service.
Today, Sorrentino made a different kind of appearance: he answered charges that he avoided paying taxes on $8.9 million. His attorney, Richard Sapinski, of Newark, New Jersey, pleaded not guilty to 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; he is represented by Chris Adams of Colts Neck, New Jersey.
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 pair are accused of failing to pay tax on nearly $9 million.
U.S. Attorney Paul J. Fishman said, about the charges, "According to the indictment, Michael and Marc Sorrentino filed false tax returns that incorrectly reported millions made from promotions and appearances. The brothers allegedly also claimed costly clothes and cars as business expenses and funneled company money into personal accounts. The law is absolutely clear: telling the truth to the IRS is not optional."
Jonathan D. Larsen, Acting Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office, concurred, saying, "Most individuals file truthful tax returns and pay their fair share of taxes. However, as alleged in today's indictment, rather than living in reality and reporting their true income, Michael Sorrentino and his brother Marc created the illusion that they earned less income by filing false and fraudulent tax returns. No matter what your occupation or status in life, if you attempt to cheat on your taxes for personal financial gain, you face real consequences including criminal prosecution and a possible prison sentence."
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 false tax return carry a maximum potential penalty of three years in prison and a $250,000 fine for each count. Failing to file a tax return carries up to one year in prison and a $100,000 fine.
Both Mike and Marc Sorrentino will be back in federal court on October 6, 2014, for an arraignment. According to criminal defense attorney Charlie Thomas, that's where the official plea will happen. An initial appearance in front of a judge is generally for purposes of establishing preliminary bail and setting dates for future appearances (like the arraignment). That is, of course, what happened today.
Until he has to show up in court again, Mike is out on $250,000 bail. There are, however, a few conditions of his bail: he's had to surrender his passport and he can't leave the states of New York and New Jersey (sorry, Jen Miller) without permission. Celeb gossip site TMZ also reports that a federal judge has ordered that Sorrentino will be subject to random drug testing and is prohibited from drinking any alcohol until his trial.
Sorrentino is clearly trying his hand at being in the spotlight a little less, posting on Facebook earlier today:
Sometimes silence is a really good answer.
You'd think.
But then there he was on Twitter:
KEEP CALM
What doesn't kill you makes you stronger.
And on Instagram, posting sage little nuggets like:
To be old and wise you must first be young and dumb
Which kind of sounds like a confession of sorts (quick, someone take away the smart phone).
It's reminiscent of reality television star Teresa Giudice - also living in New Jersey - who continues to appear on the Real Housewives of New Jersey to complain about downsizing as she awaits sentencing together with her husband on tax and fraud charges.
What is it about that spotlight?
Fame or not, celebrity or not, the real reality is that lying on your taxes has consequences. Richard Weber, Chief, IRS Criminal Investigation said about Sorrentino's arrest, "The alleged actions in the indictment today send a very clear message to the public about following the law. Whether you are a reality t.v. star or member of the public, the 'reality' is that everyone must pay their taxes and abide by the same laws. Individuals who lie on their returns deprive federal and local governments of tax money that is used for the good of everyone who lives there."
