Fmr. Stillwater Mayor Allegedly Involved In Million Dollar Fraud Case
MINNEAPOLIS (WCCO) – A fraud charge is offering more information to what may have led to the mayor of Stillwater's resignation last month.
Former Stillwater mayor Ken Harycki is also an accountant. He's charged with helping a client defraud the government of more than $10 million.
While Harycki was the mayor, he also ran Customized Payroll Solutions.
The office on Curve Crest Boulevard was raided by the FBI in March. He said the raid involved a former client.
Then, last month, Harycki resigned as Mayor.
According to the U.S. Attorney's office, Harycki's clients were Thurlee and Roylee Belfrey. The Belfrey's were charged on Tuesday with defrauding the government of more than $10 million.
A decade ago, Thurlee Belfrey pleaded guilty to stealing from Medicaid. He was barred from working with Medicaid again.
But prosecutors said the Belfreys recruited a relative to be named as owner of a company in Maple Grove to continue the fraud.
Through that company the duo is accused of illegally submitting thousands of fraudulent claims to Medicaid for millions of dollars.
The indictment said the Belfrey's tried to cover it up by moving money between at least 138 bank accounts. And the Belfrey's allegedly used some of that money to pay for luxurious cruises, airline tickets, hotel stays and more.
Prosecutors said the whole time the Belfrey's were also taking tax money from their employees, and not paying the IRS.
That's where investigators said former mayor Harycki came in. He's accused of fudging tax forms to conceal the Belfrey's fraud.
In a statement U.S. Attorney Andrew Luger said, "When individuals steal from Medicaid, they are effectively taking money from us all to line their own pockets."
The Belfrey's are out on bond.
Harycki has not had his first federal court appearance yet.