April 16, 09

NEWS / FORMER BANK OF DURANGO EXECUTIVES PLEAD GUILTY TO TAX EVASION

DENVER—Cheryl McMillan, age 56, and Marion McMillan, age 61, who reside in Kansas, pled guilty late last week before U.S. District Court Judge Christine M. Arguello to tax evasion charges, Acting United States Attorney David Gaouette and the Special Agent in Charge of the IRS Criminal Investigation Denver Field Office Christopher Sigerson announced. Marion and Cheryl McMillan, who are husband and wife, are scheduled to be sentenced by Judge Arguello on July 31st, 2009. The tax evasion took place when Marion McMillan was the President of the Bank of Durango, and Cheryl McMillan was the Vice President and chief Cashier of the Bank of Durango.

Cheryl and Marion McMillan were charged by Information on January 9, 2009 for filing false and fraudulent tax returns. They both pled guilty before Judge Arguello on April 10, 2009.

According to the stipulated facts contained in the defendants’ plea agreements, as well as their Criminal Informations, for tax year 2003, there was $102,731.15 in undeclared income as a result of embezzlements by Cheryl McMillan from the Bank of Durango. For tax year 2004, there was $125,169.14 in undeclared income as a result of Cheryl McMillan’s embezzlements from the Bank of Durango.

On or about May 7, 2004, the Board of Directors of the Bank of Durango became aware of the embezzlements and asked for the resignations of both Cheryl and Marion McMillan.
In Marion McMillan’s plea agreement, on April 15, 2005, he signed a Form 1040, U.S. Individual Tax Return for tax year 2004. He was informed of the embezzlement by an outside audit team in November 2004, yet he failed to report the money as income. In total, the government’s evidence would show that the McMillans return was understated, resulting in a tax under payment of $41,313.00. As a result of the embezzlements, there is a total tax loss for tax years 2001 through 2004 of approximately $118,171.00.

Tax evasion carries a penalty of not more than 5 years in federal prison, and up to a $100,000 fine. The defendants could also be ordered to pay restitution.

“Tax Day is right around the corner, and this serves as a reminder that taxpayers should file complete and accurate tax returns with the IRS,” said Christopher Sigerson, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “All income, regardless of the source, is fully taxable and IRS Criminal Investigation is committed to investigate and recommend for prosecution those who do not fully pay their federal taxes.”

This case was investigated by the Internal Revenue Service – Criminal Investigation, Denver Field Office (IRS CID) and the Federal Bureau of Investigation (FBI).

The case is being prosecuted by Assistant U.S. Attorney Robert Mydans.


Tags: criminal investigation,