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Plea deal sheds new light on former Baltimore police commissioner De Sousa's tax crimes

Former Baltimore Police Commissioner Darryl De Sousa admitted in federal court Tuesday that he willfully neglected to file income tax returns and falsely claimed deductions to slash the amount he owed to the Internal Revenue Service.

In a brief court appearance, De Sousa pleaded guilty to three counts of failing to file federal tax returns. He faces as much as three years in prison and a $300,000 fine when he is sentenced in March.

A career police officer, De Sousa, 54, was named the city’s top cop last January, replacing Kevin Davis. But De Sousa’s tenure ended abruptly after federal prosecutors charged him with failing to file tax returns. He resigned in May, and Gary Tuggle has been serving as interim commissioner.

The three charges account for De Sousa’s failure to file income tax returns for 2013, 2014 and 2015.

“You do agree you’re guilty of these three offenses?” U.S. District Judge Catherine Blake asked him.

“Yes, your honor,” he said.

De Sousa’s guilty plea, however, also brought to light new details of his case.

In years when he did file his taxes, De Sousa admitted to falsely claiming nine tax allowances for both federal and state tax purposes, which substantially reduced the amount of taxes withheld from his salary each year. He also claimed deductions he was not entitled to, including for unreimbursed employee expenses that he did not incur, mortgage interest and local property taxes when he did not have a mortgage or own any property, and business losses when he didn’t operate a business.

He had also falsely claimed to donate thousands of dollars to charity.

“This artificially reduced the amount of taxes that you owed,” Blake told him.

A stipulation of facts accompanying the plea agreement signed by prosecutors and De Sousa’s attorney, Gerald Martin, detailed how much De Sousa would have owed in the years he did not file federal or state tax returns. In 2015, for example, De Sousa earned at least $127,089 from the BPD. Had he filed a federal return, he would have owed a total tax of $25,514. With the nine allowances he falsely claimed, his withholdings would not have been sufficient to cover the tax debt and he would have been required to pay $7,913 in additional taxes to the IRS.

The document also detailed the deductions De Sousa falsely claimed. In 2012, for example, De Sousa claimed to spend nearly $16,000 for his job. He claimed expenses for his car, parking fees, tolls and travel expenses. The deductions cut his tax bill 37 percent.

De Sousa said little else at the hearing Tuesday. His attorney, Martin, declined to comment afterward.

The document notes that “in total, the combined tax due and owing to the United States and the State of Maryland as a result of De Sousa’s actions is $67,587.72.” The former police commissioner had paid back about $7,000, federal authorities say.

Following his indictment in May, De Sousa admitted in a statement on Twitter that he did not file state or federal tax returns in those years, but said he did have taxes withheld from his police salary and had filed returns in 2016 and for an extension in 2017. He wrote his “only explanation” was that he had “failed to sufficiently prioritize [his] personal affairs.”

The indictment left city leaders answering questions about how well they vetted De Sousa before promoting him to become Baltimore’s 40th police commissioner. He had served 30 years with the department and earned an annual salary of $210,000 when he stepped down. He served about four months as commissioner.

According to the stipulation of facts, the IRS notified the Police Department in 2015 about issues regarding De Sousa’s taxes. It mailed a “lock-in letter” to both De Sousa and the department, saying that De Sousa was not entitled to the number of withholding allowances he was claiming and instructing the BPD not to honor his current W-4 form unless it resulted in more withholding.

“As a result of the lock-in letter, BPD began withholding taxes in greater amounts from De Sousa’s regular paycheck,” the stipulation of facts stated.

In an email, City Councilman Brandon Scott called De Sousa’s guilty plea “an example that we all can learn from,” adding that he remained focused on reducing violent crime and reforming the Police Department.

“Right now that means making sure the next Police Commissioner is a Proven Crime Fighter who can also restructure and reform BPD,” Scott said.

De Sousa was prosecuted by Assistant U.S. Attorney Leo Wise and Derek Hines, the two men working to uncover the reach of the corrupt police squad known as the Gun Trace Task Force. Federal authorities have not said why they came to discover De Sousa’s tax crimes.

His case brought further instability to the ranks of the Baltimore police. The department has had four commissioners since 2015. Meanwhile, the city continues to grapple with a spike in street violence after the death of Freddie Gray from injuries suffered in police custody three years ago.

Last month, Mayor Catherine Pugh named Fort Worth Police Chief Joel Fitzgerald as her choice to become the city’s next police commissioner. Pugh has said she’s considering paying him a salary of $260,000.

The city council is scheduled to vote next month on his nomination.

tprudente@baltsun.com

twitter.com/Tim_Prudente

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