St. Paul brothers sentenced for health care fraud
ST. PAUL—Twin brothers from St. Paul who were involved, along with the former mayor of Stillwater, Minn., in a years-long, multimillion-dollar health care fraud and tax-conspiracy case have been sentenced to prison.
Thurlee Belfrey, 52, was sentenced to eight years in prison and three years of supervised release. U.S. District Judge Ann Montgomery on Wednesday also ordered that he pay more than $8.9 million in restitution. He pleaded guilty last year to conspiracy to defraud the United States and failing to truthfully account for and pay withheld taxes.
Roylee Belfrey, 52, was sentenced to five years in prison and three years of supervised release and ordered to pay $4.6 million in restitution. He pleaded guilty to two counts of failing to truthfully account for and pay withheld taxes.
Lanore Belfrey, 43, of Minnetonka, Minn., the wife of Thurlee Belfrey, was sentenced to 15 months in prison and two years of supervised release and ordered to pay $402,000 in restitution. She pleaded guilty to conspiracy to defraud the U.S.
"For more than a decade, these three defendants each played a role in a scheme that garnered millions in illicit profits by cheating government health care programs that were funded by honest taxpayers and intended for the needy," Assistant U.S. Attorney Robert Lewis said in a statement. "The sentences handed down are appropriate and just consequences."
The Belfreys, who ran several home-health care businesses, were arrested in December 2014.
According to their guilty pleas, the Belfreys deducted and collected money from their employees' wages between 2007 and 2013, ostensibly for payment of federal payroll taxes and Federal Insurance Contribution Act (FICA) taxes. Instead, they used almost $4 million of the money to finance a lavish lifestyle, including attempts to develop a reality show based on their lives, airline tickets, restaurant meals, high-end housing, a Caribbean cruise, luxury retail purchases and thousands of dollars in cash withdrawals.
The Belfreys were clients of former Stillwater Mayor Ken Harycki, 54, the owner of Customized Payroll Solutions in Stillwater.
Harycki admitted in court in January 2015 that the government lost $1 million to $2.5 million in tax revenue as a result of his preparation and filing of fraudulent tax returns and forms on behalf of the Belfreys.
Harycki, who was elected mayor of Stillwater in 2006 and re-elected in 2010, resigned abruptly in November 2014, saying he wanted time to focus on personal issues. His resignation came six months after federal investigators raided his business on Curve Crest Blvd.
Harycki was sentenced to one year and one day in prison and three years of supervised release. He also was ordered to pay more than $2 million in restitution to the Internal Revenue Service.
He began serving his prison sentence Jan. 8 at the minimum-security federal prison camp in Duluth.