Two metro-area brothers implicated with former Stillwater Mayor Ken Harycki in a scheme to hide money from the Internal Revenue Service have pleaded guilty in federal court in Minneapolis.

Thurlee and Roylee Belfrey, both 52, pleaded guilty just as their trial was scheduled to begin after a yearslong, multimillion-dollar health care fraud and tax conspiracy, acting U.S. Attorney Gregory Brooker said Tuesday.

Also pleading guilty was Lanore Belfrey, 42, the wife of Thurlee Belfrey.

Harycki, who pleaded guilty in a related case in January 2015, will be sentenced Sept. 27 after several delays. He admitted in court that he had conspired to defraud the federal government of millions in taxes through his Stillwater accounting business, then named Customized Payroll Solutions.

At Thursday's hearing before Senior U.S. District Judge Ann Montgomery, Thurlee Belfrey, of Medina, pleaded guilty to conspiracy to defraud the federal-state Medicaid program and failure to pay taxes withheld from employees' pay. Roylee Belfrey, of Eden Prairie, pleaded guilty to two counts of failure to pay taxes withheld from employees' pay. Lanore Belfrey pleaded guilty to conspiring to evade personal income taxes.

Thurlee and Lanore Belfrey personally received millions of dollars through a deceptive company, Model Health Care, because of fraudulent misrepresentations, Brooker said.

Thurlee and Roylee Belfrey admitted unlawfully "using for their own benefit" $3.96 million in withheld taxes between 2007 and 2014, including development of a reality show based on their lives, Brooker said.

Kevin Giles • 651-925-5037