Bend businessman admits to federal tax fraud
A Bend businessman who founded Vulcan Power Co., a geothermal energy company, has admitted in federal court to falsely claiming millions of dollars in donations to the University of Oregon and Stanford University on a federal tax return, prosecutors said Tuesday.
Stephen Miles Munson, 72, of Bend, pleaded guilty Monday to willfully filing a false tax return. According to court documents, on his 2008 federal income tax return, Munson falsely claimed that he donated 200,000 shares of stock to U of O and Stanford.. He claimed the shares had an alleged value of $3.2 million. In reality, Munson never made the claimed donations.
On October 8 , 2015, Munson was charged in a multi-count indictment with willfully filing a false tax return and bankruptcy fraud. He is a retired U.S. Army Captain with degrees from the University of Oregon and Stanford University. He initially pleaded not guilty to the charges.
In 1991, Munson started Vulcan Power Company, a geothermal energy company in Bend, and served in the company in different capacities, including president and chief executive officer, until 2008. In 2008, he sold a controlling interest in Vulcan Power Company for almost $15 million.
On his 2008 federal income tax return, Munson fraudulently claimed that amount as a charitable deduction, and due to his alleged donation, he requested and fraudulently received a $407,019 refund from the Internal Revenue Service for the 2008 tax year, prosecutors said.
As part of his plea agreement, Munson agreed that the loss to the IRS for the false 2008 tax return was $2,422,202.
In January 2011 , Munson entered into voluntary bankruptcy proceedings. According to court records, Munson submitted his false 2008 federal income tax return in support of his bankruptcy and omitted almost $200,000 in assets, more than $200,000 in gifts, more than $7 million in transfers to insiders and affiliates, and a $16,786 state tax refund from his original bankruptcy filings.
As part of the plea agreement, Munson agreed that the loss associated with this conduct is approximately $7.5 million.
Sentencing is set for June 9 , 2017, at 10 a.m. in U.S. District Court in Portland, before Judge Michael Mosman.
IRS spokesman Ryan Thompson in Seattle said filing a false tax return carries up to a three-year prison term, a $100,000 fine and one year of supervised release.
The sentence is driven by the loss amount, he said, and both parties may make arguments at the sentencing hearing. Relevant conduct, in this case the bankruptcy loss, and several other mitigating factors, such as the defendant’s acceptance of responsibility, may also be considered by the judge.
The case was investigated by the IRS Criminal Investigation Division and the FBI and is being prosecuted by Scott E. Bradford, Assistant United States Attorney for the District of Oregon.
