Ronald Isley, lead singer of the Isley Brothers, has been formally charged with tax evasion in Los Angeles.
Ronald Isley (left) suffered a minor stroke in August
Mr Isley, 63, faces five counts of tax evasion and one count of failing to fill in an income tax return.
The amount of alleged tax evasion involved was not revealed. Mr Isley is expected to appear in court next month.
The indictment alleges he deposited Isley Brothers royalty cheques issued to others, including his brother O'Kelly, who died in 1996.
The Isley Brothers enjoyed success in the 60s and 70s with hits such as Twist and Shout, This Old Heart of Mine and Who's That Lady.
The indictment against Ronald Isley covers the period between 1997 and 2002.
The US Internal Revenue Service (IRS) alleges Mr Isley used some of the money to buy a $1.8m house in St Louis in 1997, a 100-acre estate in Missouri worth about $1m and a yacht.
The IRS says Isley asked for half of his pay while on tour to be paid in cash and that he paid his musicians in cash.
He is also accused of having several bank accounts and of asking his booking agent to send part of his tour fees to third parties for his own benefit.
A spokesman for the IRS said Mr Isley had not filed a tax return between 1997 and 2001, so it was difficult to determine his income or how much tax may have been avoided.
Mr Isley was not available for comment.
The Isleys' most recent album, Body Kiss, topped the US charts last year.
Mr Isley worked with composer Burt Bacharach on an album featuring reworked versions of songs such as Alfie and Close to You.