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Illinois Attorney General Lisa Madigan
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October 23, 2014

MADIGAN, DEPT. OF REVENUE: TAX FRAUD OPERATION NETS $100 MILLION

Ongoing Initiative Recovers $100 Million, 50 Charged Statewide for Unpaid Sales Tax Fraud

Chicago — Attorney General Lisa Madigan and the Illinois Department of Revenue (IDOR) announced today that their joint ongoing criminal enforcement operation to prosecute gas station owners who evaded sales tax payments has recovered over $100 million for the state.

The ongoing operation led by Madigan’s Special Prosecutions Bureau and IDOR’s Bureau of Criminal Investigation was launched to recoup sales tax losses from gas stations throughout Illinois that underreported revenues to avoid paying taxes to the state. Of the 50 gas station owners that have been charged to date, 40 defendants have been already convicted, many of whom were imprisoned. Additionally, tens of thousands of tax dollars have been recouped through IDOR audits.

“The unprecedented results we’ve achieved are a reflection of our commitment to holding tax cheats accountable and to recovering money that should have gone to the state in the first place,” Attorney General Madigan said. “We will continue to pursue businesses that illegally profit at the expense of taxpayers and the state.”

“This effort reflects the outstanding work of a team of investigators, auditors and legal staff,” said Brian Hamer, Director of Revenue. “It shows our commitment to identify tax cheats, require them to pay the taxes they owe and obtain appropriate punishment, including prison time.”

The crackdown on gas station owners has led to a new law in Illinois to penalize these criminals. The law, which was an initiative of Madigan’s office and took effect in January, established stronger penalties and strengthened prosecutors’ ability to pursue Illinois businesses and retailers that evade their sales tax bills. The law created the new crime of Sales Tax Evasion and imposed graduated penalties based on the amount of sales taxes that were evaded.

The collection of unpaid sales taxes is part of Madigan’s ongoing work to collect record revenues for the State of Illinois amidst an unprecedented fiscal crisis. Since Madigan took office, her office has amassed over $10 billion in total collections through a combination of litigation and collection efforts. In 2013 alone, Madigan’s office collected $992,581,592.32 on behalf of the state, equating to $32.18 generated for every state general revenue tax dollar the Attorney General’s office received in 2013. Additionally, in the past year, Madigan has recovered $344 million for the state’s pension systems to cover losses sustained from investments in mortgage-backed securities that contributed to the economic collapse in 2008 as the result of settlements with some of the nation’s largest banks.

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