PORTLAND, Ore. (KOIN) — A former Oregon securities broker was sentenced to more than four years in federal prison on April 3 after being found guilty of evading more than $2.5 million in income taxes payments.
In addition to a 51-month prison sentence, 65-year-old McMinnville man James W. Millegan was also ordered to pay more than $2.5 million in restitution to the IRS and more than $1.4 million to a dozen of his former clients in the Portland and Salem areas.
According to court documents, Millegan attempted to conceal his earnings from the IRS between 1996 and 2016, while working as a securities broker for his company J.W. Millegan, Inc. Millegan shuttered the business in 2016 and filed for Chapter 13 bankruptcy after an arbitration panel with the Financial Industry Regulatory Authority fined him $450,000 for allegedly churning several of his clients’ investments accounts.
The Department of Justice states that Millegan evaded taxes by transferring his earnings to six different bank accounts, including $1.4 million that was stowed in his deceased mother’s trust account. Millegan transferred $3.7 million to these accounts between July of 2009 and September of 2016 and further concealed his income by submitting false financial statements to the IRS.
According to the Department of Justice, Millegan used his concealed cash to fund a “lavish lifestyle,” which included a $4.5 million home in Portland’s Dunthorpe neighborhood, a $1.3 million beach house in Gleneden Beach and a fleet of luxury cars, which included a classic 1938 Rolls Royce Phantom III. He also allegedly used the money to fund his equestrian hobbies, including stable expenses, horse riding lessons and an attempt to build a high-end equestrian competition center and resort near Sheridan.
A federal grand jury in Portland indicted Millegan on 13 counts of tax evasion in November of 2019. However, Millegan was formally charged by superseding indictment in February of 2022 and was found guilty of one count of tax evasion on November 14. Special Agent Bret Kressin with the IRS’s criminal investigation office in Seattle said that Millegan’s imprisonment is an example of what happens when someone attempts to avoid paying their “fair share.”
“It’s been said that the difference between tax avoidance and tax evasion is the thickness of a prison wall,” Kressin said. “Mr. Millegan is learning that firsthand today. While everyone is entitled to use legal means to reduce their tax liabilities, Mr. Millegan actively attempted to evade his taxes for many years. Instead of paying his fair share, Mr. Millegan lived lavishly at the expense of honest taxpayers. Today, he is answering for those crimes.”