NEWARK — Former "Jersey Shore" cast member Mike Sorrentino pleaded not guilty today to failing to properly pay taxes on nearly $9 million in income earned trading off the name he made for himself on the defunct reality series.
New Jersey federal prosecutors today charged Sorrentino, 32, and his brother with conspiring to defraud the U.S. and filing false tax returns for the years 2010 through 2012.
During a brief appearance in U.S. District Court, Sorrentino's attorney entered a not guilty plea on his client's behalf before he was released on a $250,000 bond.
Sorrentino, who arrived in court in a white BMW, left in a gray Kia driven by his attorney, Richard Sapinski.
"The situation will sort itself out," said Sorrentino, popularly known by his nickname – "The Situation."
"Thanks, guys," he said before jumping in the passenger seat.
Earlier, sporting a blue suit and white shirt opened at the collar, Sorrentino told Judge Steven Mannion he understood the charges pending against him.
He faces up to 11 years in prison and fines totaling $600,000 for charges that also include failing to file a tax return for 2011 when he pulled in more than $1.95 million in income, U.S. Attorney Paul Fishman said.
His brother, Marc, was charged in the same seven-count indictment and is facing up to 14 years in prison for the conspiracy charge and three counts of filing false tax returns.
Prosecutors did not say how much the brothers owe the government for allegedly understating the income they earned while inflating their business expenses.
"Michael and Marc Sorrentino filed false tax returns that incorrectly reported millions made from promotions and appearances," Fishman said. "The brothers allegedly also claimed costly clothes and cars as business expenses and funneled company money into personal accounts. The law is absolutely clear: telling the truth to the IRS is not optional."
The pair conspired to fail to pay federal taxes on income generated by two companies controlled by the brothers: MPS Entertainment, LLC and Situation Nation Inc., Fishman said.
One month after the MTV series premiered in December 2009, the Sorrentinos created MPS Entertainment in an effort to cash in on the celebrity status Mike Sorrentino achieved virtually overnight.
Mike Sorrentino held an 80 percent ownership in MPS and his brother held the rest.
MPS was created to exploit Sorrentino's celebrity with appearances on TV and in person as well as product endorsements for vitamins, clothing, jewelry, sunglasses and tuxedoes, according to the indictment.
The Sorrentinos owned an online clothing business, partnered in a vodka company and profited from the publication of a comic book that featured Mike Sorrentino as a superhero, the indictment adds.
Prosecutors say Mike Sorrentino raked in between $1,500 and $48,000 for appearances at nightclubs, bars and liquor stores.
A large chunk of those fees were paid in cash, with some of it going into bank accounts controlled by the Sorrentinos, prosecutors say.
But, they added, the brothers failed to declare as income all of the cash, which totaled $184,000 for 2010; $154,000 for 2011 and $31,000 for 2012.
Additionally, prosecutors say the brothers misled the Staten Island accounting firm they used about the true income received by MPS and Situation Nation.
They say the two men inflated their business expenses.
"These false and/or inflated business expenses included, among other things, payments for several high-end vehicles, purchases of high-end clothing and personal grooming expenses that were disguised as legitimate business expenses," the indictment adds.
After being given the false information, the accountant prepared a tax return for MPS that claimed $1.1 million in expenses for 2010 and understated the company's gross receipts, the indictment adds. The expenses include payments for luxury cars and clothing, the indictment adds.
"Most individuals file truthful tax returns and pay their fair share of taxes," said Jonathan Larsen, the acting Special Agent in Charge of the Newark office of the IRS' Criminal Investigation Division, whose agents led the probe. "However, as alleged in today's indictment, rather than living in reality and reporting their true income, Michael Sorrentino and his brother Marc created the illusion that they earned less income by filing false and fraudulent tax returns."
The brothers are due back in court on Oct. 6.
Under the terms of the bond agreement reached with federal prosecutors, neither brother will have to put up property as collateral. However, if they fail to appear for a court appearance they will forfeit the entire amount.
In July, Mike Sorrentino agreed to attend a 12-week anger management program as part of a plea deal to resolve a simple assault charge he faced following a dispute with his brother, Frank, at their family's Middletown tanning salon.
Sorrentino's former lawyer also says the reality television personality owes him nearly $30,000 in unpaid legal fees.
Sorrentino is the latest in a line of New Jersey celebrities to face charges of not paying taxes. Grammy-award winning rapper "Fat Joe" — Joe Cartagena — was sentenced to four months in prison in June 2013 for failing to pay taxes on more than $2 million of income in 2007 and 2008
About a month earlier, eight-time Grammy award winner Lauryn Hill received a three-month prison sentence because she didn't pay taxes on millions in income.
Thomas Zambito may be reached at tzambito@njadvancemedia.com. Follow him on Twitter @TomZambito. Find NJ.com on Facebook.