Warrenville man among 10 indicted in tax fraud case

A 48-year-old Warrenville man was among 10 people recently indicted in a vast tax-fraud scheme that could have netted the group $35 million had it been successful, federal prosecutors said.

Prosecutors announced the indictments Monday against Fernando Benalcazar and nine other men. According to the indictments, Benalcazar set up phony businesses to receive fake tax refunds. He was set to be arraigned today.

All 10 men were charged with tax fraud conspiracy and mail fraud.

The indictments paint Benalcazar as a lackey to ringleader Marvin Berkowitz, a 62-year-old Chicago man who had been living in Israel since 2003.

Berkowitz, along with two sons and a son-in-law, obtained fraudulent tax refunds using the identities of nearly 3,300 prison inmates.

Prosecutors allege Benalcazar and the five other indicted men set up shell companies to create the false tax returns. Proceeds from the fake returns were mailed to the addresses of the fake companies or deposited directly into the company accounts, according to the indictment.

Benalcazar and the other men would take a small cut of the proceeds - usually 10 percent - and funnel the rest on to Berkowitz, prosecutors said. The scheme netted the men $4 million before they were caught.

The scam operated from 2003 to 2009. Benalcazar participated from 2003 to 2006, according to court documents.

Prosecutors did not reveal how the scheme was uncovered.

If convicted of tax fraud conspiracy, the men could face a maximum of five years in prison. A mail fraud conviction could result in a maximum sentence of 20 years in prison. Berkowitz is facing additional charges that could land him in prison for longer, prosecutors said.