Tax avoidance leads to plea deal for Gary politician

City Council woman avoided tax payments since 1991.

April 1, 2013

A long-time member of the City Council in Gary, Indiana will have to resign following her guilty plea for tax evasion.

Marilyn Krusas joined the council back in 2000, representing the city’s upscale Miller Beach lakefront community.

She had become known on the council as a fiscal conservative and a stickler for keeping the council on its toes.

But apparently, in her personal finances, there were problems.

She accepted a plea deal with the U.S. Attorney’s office in Hammond today. Her defense attorney, former Gary Mayor Scott King, negotiated the deal.

In the plea deal, Krusas admits that the last time she filed personal income taxes was in 1991.

She also admits she did not pay taxes on  $232,000 she inherited four years ago.

Court documents indicate that Krusas tried to conceal the money from the Internal Revenue Service by withdrawing substantial sums of cash from her bank account through money orders and cashier checks.

She gave a relative $50,000 and kept $60,000 in cashiers checks, court records show, while using some of her inheritance money to pay off her mortgage and other creditors.

Gary City Council President Kyle Allen joined the City Council the same year as Krusas.

He said her experience with issues facing the city will be difficult to replace. 

“It is unfortunate. Experience is always good. It will be missed,” Allen told WBEZ.  “I just hope everything works out for her and I wish her the best.”

But Gary resident and city council watchdog Jim Nowacki said he’s happy to see Krusas go, mainly because she allowed big ticket projects -- like the city’s minor league baseball stadium and new police station -- to be developed.

“She became of the city’s biggest booster for the baseball stadium and the public safety building. Both of those have become problems for the city,” Nowacki said. “I’m very happy for her to lose her seat and see somebody else come in fresh.”

A sentencing date for Krusas has not been set.

She could face up to five years in prison and a $250,000 fine. 

Michael Puente is a reporter with WBEZ. Follow him @MikePuenteNews