Fumo ex-associate admits tax evasion, to pay 411G-plus to IRS

A former member of state Sen. Vince Fumo's inner circle pleaded guilty in federal district court yesterday to tax evasion.

Howard J. Cain, 59, of Wayne, admitted that he had failed to report to the IRS more than $1.6 million in income from 1997 through 2006 and that he owes unpaid taxes of more than $411,000.

He agreed to pay restitution of $411,303 plus interest to the IRS.

The feds said that Cain had not filed or paid any income taxes since 1991. Assistant U.S. Attorney John Pease said that all of Cain's income was from a company he owned, that he never filed any 1099s or W-2s with the IRS and thus had been able to "fly under the radar" of Uncle Sam.

Defense attorney Peter J. Scuderi said that he did not know why Cain had not filed or paid taxes.

In 2004, after the Fumo investigation became public, Cain contacted his accountant about his tax problem.

"I think he intended to do something but just kept putting it off," Scuderi said.

Cain has agreed to testify for the feds at Fumo's trial beginning in September.

Scuderi said that that was a "difficult decision" for Cain, but that his client has been truthful and is cooperating with the feds.

Fumo was charged in February 2007 with defrauding the state Senate, a community group he founded and a museum; he was also charged with obstructing justice, among other charges. He has denied any wrongdoing.

Cain was a political consultant for more than 30 years and had been involved in more than 80 campaigns.

The feds said Cain's single largest source of income from 1991 to 2006 came from consulting services to the state Senate Democratic Appropriations Committee, which Fumo chaired from 1985 until last year.

As part of his plea deal, Cain stipulated that he conspired with Fumo and others to bilk the state Senate by submitting bogus invoices that resulted in payments to Cain for doing political campaign work.

Cain was not charged with misusing state funds, which allegedly resulted in the loss of more than $200,000, but the uncharged fraud can be used to determine an appropriate guideline-range sentence, the plea agreement said.

The one-time Fumo insider could face 37 to 46 months behind bars under advisory sentencing guidelines.

U.S. District Judge Michael M. Baylson set sentencing for Jan. 26. Cain was released on $25,000 personal-recognizance bond.

He surrendered his passport and was ordered to transfer two firearms to a licensed firearms dealer. *