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Man pleads in fraud case

January 29, 2011
By Jenny Lancour

CHICAGO - A Chicago man - with ties to the Delta County area - has pleaded guilty to charges related to a multi-million-dollar tax fraud ring, according to a U.S. Attorney official from Illinois.

Rapid River property owner Marvin Harris, 76, of Chicago, was arrested by federal agents in 2009. He was among 10 defendants accused of filing more than 6,200 bogus income tax returns seeking $35 million in refunds. The tax ring reached as far as Israel.

Harris was arraigned in August 2009 in U.S. District Court in Chicago. He pleaded not guilty to seven counts. Charges against him included mail, wire and carrier fraud, each carrying a maximum sentencing of 20 years in prison and $250,000 in fines.

All 10 defendants allegedly involved in the tax ring were scheduled to appear in federal court in Chicago Monday to begin a lengthy and complicated trial. They were charged with five or more of 41 separate charges.

Rather than be tried, Harris pleaded guilty to all seven counts in October 2010, according to Randall Samborn, an assistant U.S. Attorney and spokesperson for the U.S. Attorney General's Northern District of Illinois.

"He is not going to trial next week. He is still awaiting sentencing. No date has been set for that at this time. He is not going to trial as a result of his guilty plea in October," Samborn explained.

Fact Box

At a glance

Rapid River property owner Marvin Harris, 76, of Chicago, was arrested by federal agents in 2009.

He was among 10 defendants accused of filing more than 6,200 bogus income tax returns seeking $35 million in refunds.

Last fall, Harris pleaded guilty to the following charges: one count of conspiracy to defraud the U.S.; one count of wire fraud; two counts of interstate commercial carrier fraud; and three counts of mail fraud.

Samborn said Friday that only one individual is scheduled to go to trial on Monday. The other nine defendants all pleaded guilty with some of them reaching plea agreements. Some have sentencing dates scheduled. Harris' sentencing date has not been scheduled but will likely take place after the trial is complete, Samborn said.

The lone defendant - Fernando Benalcazar, of Warrenville, Ill. - will be tried on five charges relating to the alleged tax scheme that netted more than $4 million.

More than 2,900 false federal income tax returns and more than 400 false state income tax returns resulted in fraudulent refunds from 2003-09.

Investigation revealed the names and Social Security numbers of more than 3,300 federal inmates were forged on these tax returns without their knowledge.

Benalcazar is charged with one count of conspiracy to defraud the U.S.; one count of wire fraud; and three counts of mail fraud.

According to the grand jury federal indictment released in August 2009, Benalcazar allegedly opened at least 10 bank accounts in his name and the names of at least six businesses including banks. From around 2004 to 2006, he received more than $800,000 in fraudulently-obtained federal and state income tax refunds deposited into his accounts.

The indictment said Harris opened at least four bank accounts at two banks in his name or business entities he controlled including Marvin E. Harris Enterprises, Marvin Harris Enterprises, and NVT Construction.

From around 2003-2008, Harris received more than $600,000 in federal and state income tax refunds directly deposited into his bank accounts. More than $300,000 in state and federal income tax refund checks were mailed to Harris to his property on T65 Road in Rapid River, to a Rapid River Post Office box, to a Gladstone address on North Lake Shore Drive, and to his home in Chicago.

Harris made headlines in the Daily Press in 2009 for alleged involvement in an animal cruelty case regarding neglected horses on his Rapid River property. A jury found him not guilty in Delta County Circuit Court in September 2009.

Harris' 40 acres in Rapid River could be forfeited if any of the $4 million received in fraudulent refunds cannot be recovered, according to the federal indictment.

 
 

 

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