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Regulation and Compliance > Litigation

Jury Convicts Ex-Broker Who Lived Lavish Lifestyle Instead of Paying Taxes

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What You Need to Know

  • An ex-broker funded a life of luxury that included Bentley and Rolls-Royce cars instead of paying the IRS.
  • A jury found him guilty of evading $2.5 million in income taxes by hiding his income in various bank accounts and submitting false financial statements to the IRS.
  • The ex-broker will be sentenced on April 3 by U.S. District Court Judge Karin J. Immergut in Portland, Oregon.

A jury in Portland, Oregon on Monday found a former registered broker guilty of evading $2.5 million in income taxes by hiding his income in various bank accounts and submitting false financial statements to the Internal Revenue Service, according to court documents.

After a two-week trial, the jury convicted James Millegan, 65, of McMinnville, Oregon, of one count of tax evasion.

“We were disappointed by the jury’s verdict and intend to appeal,” Lisa Hay, one of the attorneys representing Millegan, told ThinkAdvisor by email on Tuesday.

Instead of paying the IRS, Millegan used the money to pay for an extravagant lifestyle that included luxury cars, according to the Justice Department. Tax evasion is punishable by up to five years in federal prison, it said in a news release.

Prolific Spending

The ex-broker was described as a prolific spender by personal assistants hired to pay his bills, according to the Justice Department.

Millegan used the proceeds of his tax evasion to fund a life of luxury that included a $4.5 million house in Portland, a $1.3 million home on the Oregon coast, Rolls-Royce and Bentley cars for everyday use, equestrian expenses including stabling and lessons, and an attempt to establish a world-class equestrian competition center and resort near Sheridan, Oregon, according to the Justice Department.

He also bought a classic 1938 Rolls-Royce touring car, paid $800,000 to restore it, and showed it at premier car shows in the U.S. and Europe.

Millegan owned and operated J.W. Millegan, a small, commission-based investment advisory business that served clients in the Portland and Salem, Oregon metropolitan areas, according to court documents and the Justice Department. From 1996 to 2016, the investment firm was Millegan’s sole significant source of income.

Next Steps

Over a seven-year period from July 2009 to September 2016, Millegan failed to pay $2.5 million to the IRS, according to Justice Department. His tax returns, though, did “reflect his true income, which sometimes exceeded $1 million, and the taxes he owed on that income, which typically ranged from $125,000 to $350,000,” it stated.

At the same time, however, Millegan allegedly “concealed his income from the IRS by transferring it to six bank accounts he controlled, including transferring $1.4 million to the bank account of his deceased mother’s trust, which he used to pay his personal expenses. From July 2009 through September 2016, [he] transferred $3.7 million to these accounts,” the Justice Department said in a press release.

On Nov. 21, 2019, a federal grand jury in Portland returned a 13-count indictment charging Millegan with tax evasion and investment churning. On Feb. 17, 2022, he was charged by superseding indictment with wire fraud and tax evasion, which is punishable by up to five years in federal prison.

Millegan is set to be sentenced on April 3, 2023, by U.S. District Court Judge Karin J. Immergut in the U.S. District Court for the District of Oregon, Portland division. Plus, a jury trial on the wire fraud charges is scheduled to start in March, the Justice Department said.

 (Image: Shutterstock) 


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