Vandeheede pleads guilty in federal tax fraud case, cooperating with FBI

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A Silvis businessman pleaded guilty to federal tax fraud and has agreed to cooperate with the FBI in an ongoing federal investigation.

According to federal court documents, Michael Vandeheede admits under-reporting more than $380,000 in income and filing false tax returns between the years of 2006 and 2008.

The charges stem back to when Vandeheede worked for a video gaming business called M.G.T. Lottery Services out of Chicago.

According to court records, the company's business plan centered around establishing video poker machines at racetracks and Indian casinos, and marketing a poker game suitable for state lotteries.

Vandeheede's role in the company was "to raise investment funds and initiate contacts with state government officials" for which he was paid commissions and a monthly retainer.

The plea deal calls for Vandeheede to serve 12 months and one day in prison,  and cooperate with the government, and provide law enforcement with "everything he knows or has reason to believe about the criminal conduct of others," including testifying in front of a grand jury.

Vandeheede was indicted in November of 2012.

He also is one of the partners in the redevelopment of the old Case plant in East Moline, with businessman Dan Murphy and State Senator Mike Jacobs of East Moline.

Vandeheede is scheduled to be sentenced in January 2014.