THE HOUSE OF CARDS COLLAPSES: IS RAY MARCHAN PERSON D?

By Juan Montoya

As more and more news media try to link local lawyers to the information contained in a plea packet memo agreed upon by convicted former district judge Abel Limas, some names of local attorneys are emerging as likely targets in the mushrooming federal net against judicial corruption.
The names of Austin attorney Mark Rosenthal is one. Former State Rep. Jim Solis is another. They are most likely Person A and Person C. Person B was Limas' "gopher" Manuel Longoria, now also under indictment. But people have been asking, who is person D?
And now, as the cases are being sifted, the most likely candidate appears to be Brownsville attorney Ray Marchan. The plea packet memo shows that an attorney identified as Person D paid $4,500 dollars to get appointed as an ad litem attorney in a December 2005 lawsuit, which ended in a $7 million dollar settlement. That case involved his appointment as an ad litem attorney appointed by Limas to oversee an estate or act as a guardian for a child or an incapacitated adult.
The plea agreement show that Person D got a $12,000 dollar check in October 2008 and paid Limas $4,500 dollars. News media have reported that although court records show that 15 attorneys were involved in the case, Marchan was appointed by Limas as an ad litem in the case back in January 2008. On September 11, 2008, the firm of Albert Garcia and Adrian Martinez issued a press release of a jury award $9 million in damages to their clients Dr. Juan and Sylvia Mancillas in their lawsuit against the National Heritage Foundation (“NHF”). "Dr. and Mrs. Mancillas sued NHF in 2005 because NHF changed the beneficiaries of three multi-million dollar life insurance policies from the Mancillas children to itself.NHF is a 501(c)(3) organization headquartered in Falls Church, Virginia that manages thousands of accounts called “donor advised accounts” created by individuals who engage in various charitable projects. NHF acts as the bookkeeper for the hundreds of millions of dollars kept in these donor advised accounts. The lawsuit involved what the IRS called an abusive tax shelter known as a charitable split dollar life insurance plan. Between 1997 and 1999, NHF peddled this tax scheme to people across the country. The typical arrangement worked like this—a donor made a charitable “donation” to NHF and took a tax deduction. NHF used those donations to pay premiums on large life insurance policies. The beneficiaries of the life insurance policies were primarily the donor’s heirs, but a smaller portion of the death benefit would go to a charity chosen by the donor. NHF made money by charging a 4.5% fee on the full amount of the death benefit. In December 1997, NHF sold Dr. and Mrs. Mancillas a charitable split dollar life insurance plan with annual premiums of about $85,000 on $7 million in life insurance.
The Mancillases two sons were the beneficiaries of $5 million of the life insurance, and the Sisters of the Incarnate Word, a organization of Catholic nuns in Brownsville, were the beneficiaries of the other $2 million.
The large amount of life insurance was necessary because the Mancillases youngest son suffered a severe brain injury at the age of 6 that has left him unable to speak, walk or care for himself. In 1999, the IRS determined that donations made in connection with these plans were not tax deductible. At that time, NHF had about 600 of these plans nationwide, with potential life insurance death benefits aggregating between $600 million and $2 billion.
If these deals went away, NHF stood to lose between $25 and $90 million in fees. The Mancillas paid a total of $548,000 in premiums over seven years with no knowledge that NHF had changed the beneficiary to itself." After the large settlement, Martinez and Garcia paid Marchan $12,000 of which Limas said in his plea agreement that he had been given $4,500 in cash at Marchan's Brownsville office. Another case involving Marchan is the Aide Fink vs. Sun Valley Crop Dusting Co. case.
The May 2006 lawsuit is also mentioned the Limas plea agreement. The plea packet memo shows that Person D paid $5,000 dollars to Limas after his client Aide Fink missed a court hearing and the defendants filed a motion for sanction her. Court records show that Ray Marchan and Joseph Moreno represented Fink while San Benito-based attorney Randall P. Crane represented the defendants.