Suburb Man Charged in Huge Tax Scheme

His grandfather and namesake was a Chicago visionary, butprosecutors alleged Tuesday that Charles H. Wacker III is afar-sighted cheat who concocted a network of dummy corporations toevade more than $5 million in taxes.

In what U.S. Attorney Michael J. Shepard called the largestestate and tax fraud case ever filed in northern Illinois, Wacker wascharged in a 16-count indictment accusing him of wire fraud, filingfalse tax returns and trying to impede an Internal Revenue Serviceinvestigation.

The indictment, voted by a grand jury on July 13 but not madepublic until Tuesday, accuses Wacker of setting up dummy corporationsin Panama and Hong Kong and bank accounts in Britain and Switzerland- all managed by a foundation created in Liechtenstein.

They were used to hide assets that included the family's 16-acreLake Bluff compound, other real estate holdings, thoroughbred racehorses, cash and income, according to the indictment.

The charges carry a maximum sentence of 70 years in prison andfines of $2 million, according to the U.S. attorney's office.

Wacker's whereabouts are unknown, and his attorney, WilliamHundley of Washington, D.C., could not be reached for comment.

However, his brother, Frederick G. Wacker Jr., 75, of LakeBluff, said he was at loss to explain the allegation. "It breaks myheart to hear what's happening to the reputation our grandfather andfather worked so hard to earn," he said.

Charles Wacker III is the grandson of turn-of-the-centurybusiness and civic leader Charles H. Wacker, who took the rundownSouth Water Street of the early 1900s and turned it into thedouble-decked esplanade that now bears his name.

Wacker, who chaired the Chicago Plan Commission from 1909 to1927, pushed Daniel Burnham's "Chicago Plan," which laid out theblueprint for much of the system of lakefront parks, railways,highways and museums that honeycomb Chicago today.

The indictments against Wacker paint a picture of a manpossessed by personal gain.

In 1981, according to the charges, Wacker allegedly created acorporation called Imatra Research Limited, in which his motherinvested $400,000. It was supposed to do research in batteries.Instead, Wacker diverted the money to his personal accounts,according to the indictment.

Wacker, who had homes in Lake Bluff, Malibu, Calif., Oregon andLondon, also is charged with listing the residences as horse breedingproperties and illegally deducting them as business expenses.

Between 1981-86, the indictment claims Wacker owed $1.95 millionin income taxes and paid only $48,860.