Wis: Ex Arts Official Indicted for Fraud

Source:ap.org Author:Ryan J. Foley Date:03/25/14 Click:

Wisconsin: Former Arts Official Pleads Guilty to Fraud, Tax Charges

MADISON, Wis. (AP) -- The former head of a prominent Madison arts center pleaded guilty Thursday to charges that he ran side businesses from his city office and lied about his income to avoid taxes.

Robert D'Angelo, former director of the Overture Center for the Arts, pleaded guilty to one count of mail fraud and one count of filing a false income tax return. In exchange, federal prosecutors dropped 37 other counts of fraud, money laundering and tax charges contained in an indictment returned last year.

The charges carry a maximum of 23 years in prison but D'Angelo, 63, faces far less time under federal sentencing guidelines. His lawyer, Stephen Hurley, said his client might face about two years in prison under the guidelines when he is sentenced on April 22.

Assistant U.S. Attorney Dan Graber said he was ready to prove that D'Angelo ran two personal businesses using city computers, workers and supplies. One of the businesses involved buying and selling used CDs and books and the other involved arts consulting work. Prosecutors say the two endeavors brought in $238,000 in gross revenue over a five-year period.

The investigation turned into a First Amendment showdown after online retailer Amazon.com Inc. refused a subpoena asking it to identify those who bought books from D'Angelo. A federal judge ruled the customers have a constitutional right to keep their reading habits from the government in what Amazon lawyers called a landmark ruling.

The city hired D'Angelo to run its civic center in 1990, and he later became the director of the Overture Center, a sparkling arts venue in downtown Madison that hosts plays and concerts and houses an arts museum.

A philanthropist gave the city $205 million to build the center -- across the street from the courthouse where D'Angelo pleaded guilty to underreporting his 2004 income by $22,000 and using the mail to defraud the city.

"I violated a fiduciary duty that I owed to the city of Madison for personal gain," D'Angelo said. At another point, he added: "I signed tax returns knowing that I earned more money than I reported."

D'Angelo agreed to work with the IRS to correct his tax liability between 1999 and 2005. He has already paid $37,955 in back taxes under the deal, Graber said.

Graber said testimony would have showed D'Angelo violated the city's ethics code and hid his side businesses from three mayors. D'Angelo abruptly retired in 2005 after he was accused of sexual harassment by a receptionist.

In a brief statement, D'Angelo said he mostly ran the businesses from his home but he occasionally did so from the office. He said he often worked 12 hours per day and did private work during down time.

Graber painted a different picture, saying D'Angelo would often skip work for part of the day to go to garage sales, sell goods to city employees and spend hours hawking used books and CDs online. D'Angelo routinely told the receptionist to hunt through newspapers to find garage sales he might want to visit, he said.

"He spent much of his time during the work week on these businesses" and bragged about how much money he made to co-workers, Graber said.

D'Angelo, who won praise for his skills in booking shows and promoting Madison's arts scene, declined to comment while leaving the courthouse.

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