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Ex-state legislator going on trial on tax counts stemming from Madigan probe

Former Democratic state legislator Annazette Collins is scheduled to go on trial on federal tax charges Tuesday, nearly three years after she was indicted amid the sprawling investigation into an alleged scheme by Commonwealth Edison to bribe then-House Speaker Michael Madigan.

Collins, 61, who worked as a ComEd lobbyist after her career in Springfield ended more than a decade ago, was indicted in 2021 on federal charges alleging she underreported income and failed to file federal income tax returns for her lobbying and consulting firm.

The charges came as federal authorities were closing in on Madigan, charging a string of ex-lawmakers and lobbyists with ties to the then-powerful speaker and ComEd, including Collins’ former colleague, ex-state Rep. Edward Acevedo and his two sons, who were convicted on tax-related counts.

Madigan himself was indicted a year later on racketeering charges alleging his elected office and political operation were a criminal enterprise that provided personal financial rewards for him and his associates.

Also charged was Madigan’s longtime confidant, Michael McClain. Their trial is set for October.

Collins’ case, meanwhile, will be decidedly more dry, as the jury is not expected to hear any evidence of the Madigan probe and little about her background as a legislator.

Jury selection is set to begin Tuesday before U.S. District Judge Jorge Alonso. The trial is expected to last about a week.

Collins, who represented Chicago’s West Side, is charged with three counts of filing a false individual income tax return, two counts of failing to file a corporate income tax return, and one count of willfully failing to file an individual income tax return.

The most serious charges carry up to three years in prison.

According to prosecutors, Collins earned between $45,000 and $87,000 annually between 2014 and 2016 from her private consulting and lobbying firm, Kourtnie Nicole Corp., but “habitually under-reported” both her income and her company’s receipts for tax purposes.

In her 2014 and 2015 tax returns, Collins reported net business income of around $11,000 each year, and in 2016, she failed to report any individual or corporate income whatsoever, despite the fact that KNC received $162,000 in gross receipts and Collins had paid herself over $73,000, according to the charges.

Prosecutors also alleged that during the same time frame, Collins failed to report nearly $100,000 she had separately earned as an agent for American Income Life Insurance Co. After discovering the omitted income in 2016, the IRS hit Collins with $26,000 in assessments and penalties. She entered into a payment plan but stopped making payments, and currently owes more than the original assessment, prosecutors say.

Prosecutors allege that Collins filed an amended return that claimed nearly 23,000 miles in business-related travel and $50,000 in alleged expenses for her job as an insurance agent, including nearly $8,000 for “work clothes,” $1,000 for “cleaning of work clothes,” and nearly $9,000 for “repairs and maintenance.”

Collins was fired from her insurance job “for cause” in September 2014, but the specific reason for being let go has not been made public.

In court filings, Collins’ attorney, Shay Allen, has indicated he will argue it was Collins’ accountant who failed to file accurate personal returns or notify her that she needed to file a corporate income tax return, and that there was no willful attempt by Collins to cheat the system.

“It’s going to be absolutely probative to the jury to be able to decide if Ms. Collins was willfully trying to stiff the government, or was she attempting to do the best to her knowledge and ability, working with a so-called accountant, to get these things done,” Allen said in a recent pretrial hearing.

Collins was a longtime state representative before being appointed to fill a vacancy in 2011 left by state Sen. Rickey Hendon’s abrupt resignation. She left the legislature after losing the March 2012 primary.

Meanwhile, Collins’ replacement in the House, state Rep. Derrick Smith, was convicted in 2014 of federal bribery charges for taking $7,000 in cash from a campaign worker as part of an FBI sting.

Collins’ legislative career was also dogged by controversy. In 2012, the Tribune reported she was one of several lawmakers whose legislative scholarship awards were under review by a federal grand jury.

Collins chose to give one of the coveted free rides to a University of Illinois at Chicago student who moved to the city from Texas for school, the Tribune reported.

She also faced allegations that she distributed the scholarships benefit to students living outside of her district — one of the few requirements of the now-defunct program.

No criminal charges were ever filed as a result of that investigation.

Records show Collins registered as a contract lobbyist for ComEd in 2014, a year after she left office. Her last year registered for the utility was in 2019, when news of the federal bribery probe began to surface.

She collects an annual state pension of about $40,000, records show.

jmeisner@chicagotribune.com