A Fresno man is surrendering himself to the U.S. Marshals after a 20-count indictment was returned against him by a federal grand jury, acting U.S. Attorney Phillip A. Talbert said.
Talbert said Mark Merrill Reynolds, 60, was charged with embezzlement, mail fraud and money laundering after operating a health care claims business that claimed to hold the funds of clients and withdraw amounts for specific purposes relating to their claims.
An estimated $6,089,500 was allegedly embezzled by Reynolds over a five-year period. The company serviced around 3,200 clients from across 22 states during that time, Talbert said. Reynolds did reimburse approximately $1,613,500.
Reynolds is being defended by Fresno attorney Roger Nuttall, who issued a news release Thursday afternoon calling Reynolds’ indictment an “overreach” by the federal government.
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“Not one customer, employer group, nor one person has been hurt as a result of these baseless allegations,” Nuttall said. “Simply stated, there are no victims surrounding this issue, and it’s highly unlikely we will ever see any victims.”
The business, Ben-E-Lect, operated out of Fresno and Tulare counties, and its clients paid into Employer Elect accounts.
Court documents show Reynolds is the president and sole shareholder of the company and allegedly used client funds for purposes like business operations, personal mortgage, vehicle loan and credit card payments. Reynolds also allegedly spent client funds to purchase a 30 percent interest in a payroll company.
Before spending the money, Talbert said, Reynolds allegedly diverted the client money into different accounts to conceal the source.
Reynolds is expected to be arraigned on at 2 p.m. Friday.
If convicted, he faces a maximum 10-year prison sentence for embezzlement and a maximum 20-year sentence for mail fraud with charges of $250,000 for each crime. Reynolds also faces a maximum sentence of 20 years in prison and a $500,000 fine if convicted of money laundering.