Stillwater Ex-Mayor Pleads Guilty To Tax Fraud Conspiracy
MINNEAPOLIS (WCCO/AP) -- The former mayor of Stillwater has pleaded guilty to tax fraud conspiracy.
Ken Harycki entered the plea in federal court Thursday in Minneapolis. Prosecutors say Harycki knowingly prepared false tax forms to help the owners of health care companies conceal between $1 million and $2.5 million in tax liabilities.
The Internal Revenue began investigating Harycki in October 2012. A federal search warrant affidavit says Harycki created shell companies for the owners and filed false tax returns on their behalf.
According to the plea agreement, Harycki admitted he owned and operated businesses that provided bookkeeping, payroll and accounting services to clients. In 2007, he provided payroll service to Model Health Care. Taxes were being taken out from employee paychecks, but they were not being paid to the government. Instead, that money was used to pay co-conspirators, their families and fund other businesses operated by co-conspirators.
The plea agreement states Harycki created the company MKH Holdings, Inc., to control bank accounts operated by the co-conspirators. The company was used to take the deducted taxes that weren't paid to the government and pay the co-conspirators.
Sentencing guidelines call for 36 to 42 months in prison. A sentencing date has not yet been set.
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