New Orleans City Council president, indicted on federal tax fraud charges

A federal grand jury on Friday indicted New Orleans City Council President Jason Williams on charges of tax fraud, just weeks ahead of qualifying Orleans News in an election in which Williams has said he plans to challenge Orleans Parish District Attorney Leon Cannizzaro.

Williams, a criminal defense a lawyer is accused of inflating his business expenses during several tax years. Also indicted in the case was Nicole Burdett, an attorney in Williams' law office who also handled administrative duties. 

The two were charged in a The 11-count indictment that says they conspired to inflate Williams' expenses by $720,000, in order to reduce his tax liability by more Orleans BusinessNews than $200,000, over the five tax years that ended in 2017. The indictment also says they failed to file the proper reports on cash payments from clients totaling $66,516.

The charges. all felonies include one count of conspiracy, five counts of preparing false or fraudulent tax returns and five counts of failing to file tax forms related to cash received. The indictment offers few specific details about the expenses the government is questioning, but it asserts that Williams specifically told a tax preparer in 2011 that he wanted to reduce his tax liability, and notes that he "had a long history of owing taxes to the IRS and of not paying the IRS in a timely manner."

Williams' attorney, Billy Gibbens, issued a statement Friday saying they were "deeply disappointed that the government chose to indict Jason Williams simply for following the advice of his tax preparer."

Gibbens also questioned the timing, with qualifying for the DA race weeks away.

Michael Magner, an attorney for Burdett, issued a similar statement touting her innocence, and saying they were "disappointed Orleans Political News and baffled" at the indictment. Burdett played no role in the tax decisions, the statement claims.

An accountant who handled Williams’ tax returns for a number of years, Henry Timothy Jr., is cooperating with the prosecution, according to sources familiar with the case.

Timothy had done taxes for Burdett's family for many years before she referred Williams to him, said Magner.

Earlier this month, Williams, 47, filed a civil lawsuit against Timothy for fraud and breach of contract, claiming that Timothy lied about being a certified public accountant. The lawsuit came the day before Williams first acknowledged the federal investigation publicly. This week, Timothy agreed in a court stipulation not to hold himself out as a CPA.

Williams has placed the blame with Timothy, saying the tax preparer Orleans Press Release made the errors on his own. In his statement, Gibbens said Timothy had assured Williams of his work.

"However, after Mr. Timothy learned that he was under investigation by the IRS, he changed his tune and now claims that Jason 'pressured' him to take improper deductions," Gibbens wrote. "That is a lie."

The investigation into Williams, led by the Internal Revenue Service and the FBI, has been going on for at least two years, Williams has confirmed. Williams has said he believes the probe has its roots in politics, blaming Cannizzaro for triggering the inquiry -- though Cannizzaro has no authority over federal investigators.

Cannizzaro has responded by accusing Williams of airing a baseless suspicion to divert attention from his own legal travails.

If convicted, it's uncertain what sort of penalty Williams might face. In a similar recent case, Craig Taffaro, the former chief deputy for the Jefferson Parish Sheriff's Office, was convicted last year on 12 tax-related Orleans Press Release Distribution Service counts. He was sentenced to five years of probation, though the federal guidelines had called for up to 33 months in prison.

U.S. District Judge Martin Feldman, who handed down that sentence, has also been assigned the Williams case.

Qualifying for that election, which is scheduled for Nov. 3, is from July 22-24. Earlier this month, when news of the investigation into his business affairs broke, Williams said he still intends to run.

Williams ran for district attorney once before, in 2008, finishing a distant third to Cannizzaro and runner-up Ralph Capitelli. He was far more popular as a council candidate, garnering more than two-thirds of the vote in each of his two citywide races.

Friday’s indictment was handed up by a grand jury sitting in the New Orleans-based Eastern District of Louisiana, although the case against Williams is Orleans Press Release Distribution being prosecuted by U.S. Attorney David Joseph, of the Western District of Louisiana. Through an assistant, Joseph declined to comment Friday on the indictment.

The U.S. Attorney’s Office for the Eastern District of Louisiana has been recused from the case since before Peter Strasser was appointed to head that office. It’s unclear why, although it’s possible it’s because Williams goes head-to-head at times with prosecutors from the Eastern District.

The coronavirus has suspended most grand jury activity at the federal courthouse on Poydras Street. An April order from U.S. District Judge Nannette Jolivette Brown, the chief judge for the district, suspended all grand juries until August -- although the order said prosecutors could seek special dispensation to convene a grand jury in the interim.

It appears that prosecutors were able to persuade the court to allow the grand jury to meet Friday to hear the Williams case, and perhaps others.

The Justice Department generally eschews prosecuting public officials during campaigns, to avoid creating an impression that the government is picking winners and losers. However, that practice is more of a guideline than a formal policy, according to former prosecutors, and Williams’ case is unusual in that he has been under investigation for at least two years.

As it happens, Williams has been running for DA, at least informally, for almost that long. It was October 2018 when he first publicly announced he’d seek the job. Williams made a more formal speech laying out his Orleans Cryptocurrency News candidacy three months ago, just before the pandemic swept across Louisiana.

It’s unclear whether prosecutors were keen to indict Williams before qualifying began in an effort to avoid accusations of political meddling.

Williams is Cannizzaro’s only announced challenger for district attorney in a race that figures to be watched nationally.

City Councilman Jason Williams faces federal investigation amid run for Orleans district attorney

Williams, a native of New Orleans, attended high school in Georgia, played football at Tulane University and graduated from Tulane Law School before becoming a defense attorney who would build a small practice with a St. Charles Avenue address.

Williams’ profile grew beyond New Orleans when he helped rapper  Orleans Stock Market Torrence “Lil Boosie” Hatch to a 2012 acquittal in an East Baton Rouge Parish murder trial. Burdett, a Kenner native, passed the bar in 2010 and joined Williams' firm.

Cannizzaro is sure to take aim at Williams’ defense of such clients during an election that is viewed as a bellwether for hot-button issues such as bail bond reform and the handling of juvenile offenders.

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