A former Oregon broker has been sentenced to 51 months in federal prison for evading more than $2.5 million in personal income taxes and using the excess cash to fund a lavish lifestyle, according to a press release from the U.S. Attorney's Office, District of Oregon.
James W. Millegan, 65, of McMinnville, Ore., also was sentenced Monday by U.S. District Court Judge Karin J. Immergut to three years’ supervised release and ordered to pay more than $2.5 million in restitution to the Internal Revenue Service and more than $1.4 million to 12 former clients.
Millegan was indicted in November 2021 by a federal grand jury in Portland, Ore., charging him with 13 counts of tax evasion and investment churning. That was followed by a superseding indictment in February 2022, charging him with wire fraud and tax evasion. He was convicted at trial in November 2022 on one count of tax evasion. The wire fraud charges were dismissed at sentencing.
Millegan, according to the press release, owned and operated J.W. Millegan, Inc. (JWMI), a small, commission-based securities broker-dealer business that served clients from 1996 until 2016 in the Portland and Salem, Ore. metropolitan areas. He shuttered the business and filed for bankruptcy when a Financial Industry Regulatory Authority arbitration panel found that he had churned the investment accounts of several clients and fined him $450,000.
Prosecutors said Millegan skipped out on paying $2.5 million in income taxes from 2006 to 2015. “Millegan filed tax returns each year reflecting 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. Despite these returns, Millegan usually paid almost no taxes when due,” the press release said.
Millegan concealed his income from the IRS by transferring it to six bank accounts he controlled, prosecutors said. From July 2009 through September 2016, he transferred a total of $3.7 million to these accounts, including $1.4 million to the bank account of his deceased mother’s trust, which he used to pay his personal expenses, prosecutors said. He also submitted false financial statements to the IRS to further hide his income.
Millegan, who was described as a prolific spender by personal assistants, used the proceeds to fund an extravagant lifestyle that included a $4.5 million home in Portland’s Dunthorpe neighborhood, a $1.3 million beach house in Gleneden Beach, Ore., luxury automobiles, and equestrian expenses like stabling and lessons, prosecutors said. He also attempted to establish Wallace Bridge, a world-class equestrian competition center and resort near Sheridan, Ore., the press release said.
Prosecutors said that Millegan bought a classic 1938 Rolls Royce Phantom III touring car and spent $800,000 restoring it and showed it in premier car shows in the U.S., United Kingdom and Europe, all while owing hundreds of thousands of dollars in past due taxes.
Millegan began his career in 1983 with Lehman Brothers, according to BrokerCheck. He left in 1990 to join Ragen Mackenzie Inc., before launching JW Millegan, Inc., in 1996.