Wayne Resident Sentenced After Pleading Guilty to Tax Evasion

January 28, 2010 - Howard J. Cain, 61, of Wayne, PA, was sentenced today to 10 months in prison in connection with his guilty plea and conviction of one count of tax evasion in June 2008. As part of his guilty plea agreement, Cain admitted that, for the years 1991 through 2006, he filed no individual federal income tax returns, failed to report more than $1.6 million in personal income to the IRS, and paid none of the more than $400,000 in federal income taxes that he owed to the Internal Revenue Service.

Cain was a political campaign strategist and media consultant whose single largest source of income, during the years charged, came from contracts to provide services to the Pennsylvania Senate Democratic Appropriations Committee (“SDAC”), chaired by then-State Senator Vincent J. Fumo. As part of his plea agreement, Cain admitted that he engaged in a conspiracy with Fumo and others to defraud the Senate of Pennsylvania by submitting false invoices under the contract with the SDAC, resulting in fraud losses of more than $200,000. That uncharged criminal conduct was a consideration in determining the appropriate sentencing guidelines range of imprisonment and fine in this case.

In addition to the prison term, U.S. District Court Judge Michael M. Baylson ordered Cain to serve 3 years of supervised release, pay restitution to the Internal Revenue Service in the amount of $1,021, 499, and pay a special assessment of $100.

The case was investigated by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation and is being prosecuted by Assistant United States Attorneys John J. Pease and Robert A. Zauzmer.