In 2007, Marchelletta, Jerry Marchelletta Sr. and Theresa Kottwitz were charged for their alleged roles in a tax fraud conspiracy that allowed the Marchellettas to avoid paying more than $1 million in income taxes.
All were convicted at trial and sentenced to prison: three years for Marchelletta Jr., 33 months for Marchelletta Sr. and two years for Kottwitz. Before they began serving their time, however, the federal appeals court reversed their convictions on grounds the jury did not receive proper instructions before beginning deliberations.
U.S. District Judge Timothy Batten, who has overseen both the criminal and civil cases and sifted through mountainous court filings, had set the new trial for Sept. 24. But the case ended quickly Wednesday. During a 15-minute hearing, prosecutors dismissed all charges against Marchelletta Jr. and Kottwitz.
Marchelletta Sr. pleaded guilty to a single misdemeanor count of failing to file a 2001 federal income tax return.
Because Marchelletta Sr. has already paid those taxes, no restitution is necessary, Assistant U.S. Attorney Christopher Bly said. The government also agreed to a sentence of probation that has already been satisfied for the time Marchelletta Sr. was out on bond both before and after the 2007 trial.
Marchelletta Sr.’s penalty: a special assessment of $25.
Batten said he was happy to end the contentious litigation. “The knot is untied,” he said upon adjourning the hearing.
In a joint statement issued after the hearing, the U.S. Attorney’s Office and Bernhoft, the Marchellettas’ lawyer, said the parties “mutually believe that the resolution of this matter is in everyone’s best interest, without spending the significant resources required to retry a case based on events that occurred many years ago.”
Kottwitz’s lawyer, Jerry Froelich, noted the investigation began in 2001. “It’s an 11-year-old case and it’s time to get rid of it,” he said.