Jay Clayton, the United States Attorney for the Southern District of New York, and Harry T. Chavis, Jr., Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigations (IRS-CI), announced that Dennis Ostermann has pled guilty to aiding and assisting in the preparation of a false U.S. income tax return. Ostermann, a former Sergeant with the New York City Police Department (NYPD), entered his plea before U.S. Magistrate District Judge Ona T. Wang. The case is assigned to U.S. District Judge Lorna G. Schofield.
"At the direction of a senior union official, Ostermann reported payments as 'legal fees' when they were not," stated U.S. Attorney Jay Clayton. "We all share the responsibility for reporting income and expenses accurately on our tax returns, and no rank or position exempts any person or organization from these obligations."
IRS-CI Special Agent in Charge Harry T. Chavis, Jr., remarked: "Ostermann misrepresented the movement of funds, lied on his taxes and betrayed the confidence of union members. He violated the trust of his position as controller for a law enforcement union and as a return preparer. With today’s guilty plea, Ostermann is now taking responsibility for his criminal acts, and he will now face the consequences."
According to court documents and statements made in public proceedings, Ostermann served as Controller of a union representing current and former NYPD sergeants (the Union) and was also a partner at HB Consultants Inc. (HBC). In 2018 and 2019, he paid $150,000 from HBC's bank account to a third party on behalf of the former President of the Union and falsely reported it as legal fees on HBC's tax returns.
Ostermann's actions disguised payments made on behalf of the former Union President and fraudulently reduced HBC's tax liability along with that of its partners, including himself.
Dennis Ostermann, 68, from East Rockaway, New York, pled guilty to one count carrying a maximum sentence of three years in prison. Sentencing by Judge Schofield is set for August 29, 2025.
The potential maximum sentence is prescribed by Congress; however, sentencing will be determined by the judge.
Mr. Clayton praised IRS-CI and FBI efforts in this case handled by the Public Corruption Unit with Assistant U.S. Attorney Alexandra Rothman leading prosecution.
