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An Oregon-based head of a small investment advisory firm faces as much as five years in prison after he was convicted for evading $2.5 million in income taxes, according to the Department of Justice.

James Millegan, the head of J.W. Millegan Inc., was convicted of one count of tax evasion after a two-week jury trial that concluded this week in Oregon federal court in Portland. 

Millegan launched his namesake firm in 1996, after previous stints at Ragen MacKenzie and Lehman Brothers, according to his FINRA BrokerCheck profile. His commission-based practice worked with clients in both Portland and Salem, Ore., for about 20 years, according to the Justice Department.

But starting in July 2009, Millegan began to avoid paying taxes on his income, according to the DOJ. Millegan would submit accurate tax returns, showing annual income that sometimes passed $1 million, and would accurately indicate the taxes he owed, ranging from $125,000 to $350,000. But he would then fail to pay, according to the DOJ.

In order to evade collection, Millegan transferred his income into six different bank accounts, including putting $1.4 million into the account of his deceased mother’s trust, which he would then use for personal expenses, according to the Justice Department. In all, Millegan transferred $3.7 million into these accounts between July 2009 through September 2016, and would also submit false financial statements to the IRS in order to hide his gains.

But personal assistants hired by Millegan described him as a “prolific spender,” according to the DOJ. Instead of paying his taxes, Millegan helped pay for a $4.5 million home in Portland as well as a $1.3 million house on Oregon’s coast, horse stables and riding lessons and efforts to build a “world-class” equestrian competition center and hotel near Sheridan, Ore. 

Millegan also bought Rolls-Royce and Bentley cars; in one case, Millegan bought a 1938 Rolls-Royce, spent $800,000 to restore it, and brought it to car shows in the United States, the United Kingdom and Europe, according to the DOJ.

Representatives for Millegan did not respond to a request for comment. 

Millegan was charged with a 13-count indictment of tax evasion and investment churning in November 2019, and was subsequently charged with wire fraud, with a jury trial slated to begin in March.

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