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Bank Executives Sentenced – Former Bank of Durango Executives Sentenced for Tax Evasion

LawFuel.com – Legal News Service – September 18 2009

DENVER – Cheryl McMillan, age 56, and Marion McMillan, age 61, both of whom now reside in Newton, Kansas, were sentenced today by U.S. District Court Judge Christine M. Arguello to serve federal prison sentences for tax evasion, United States Attorney David Gaouette and the Special Agent in Charge of the IRS Criminal Investigation Denver Field Office Christopher Sigerson announced. Cheryl McMillan was sentenced to serve 24 months in federal prison, followed by 3 years of supervised release. She was also ordered to pay restitution to the IRS in the amount of $106,887.56. Marion McMillan was sentenced to serve 6 months in federal prison, followed by 3 years of supervised release, with the first 6 months of release on home detention with electronic monitoring. He was also ordered to pay restitution joint and several with his wife to the IRS, in the amount of $35,868.73. Both defendants are free on bond. They were ordered to report to a Bureau of Prisons facility within 15 days of designation. The tax evasion took place while 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. They are husband and wife.

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. They were sentenced today, September 17, 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 approximately $112,169.14 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 approximately $36,000.00. As a result of the embezzlements, there is a total tax loss for tax years 2001 through 2004 of approximately $106,000.00.

“No matter who you are, if you unlawfully evade your income taxes, there will be criminal consequences,” said U.S. Attorney David Gaouette.

“The taxpayer is ultimately responsible for their tax liability regardless if the income is embezzled,” said Christopher Sigerson, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.

This case was investigated by the Internal Revenue Service – Criminal Investigation, Denver Field Office (IRS-CI).

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

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