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Portland CPA gets 51 months in major embezzlement scheme

KTVZ file

A Portland certified public account was sentenced Thursday to 51 months in federal prison and 3 years’ supervised release for wire fraud and tax evasion. Prosecutors said he used more than $4.4 million embezzled from clients to live “an extravagant lifestyle” and build a large marijuana business.

According to court documents, since 2012, Nathan Wheeler owned and operated Bridge City Advisors LLC, an accounting firm that provided investment and legal services to clients throughout the Portland area.

Officials said Wheeler used his position as a CPA to persuade clients to invest in various real estate development projects. Instead of providing promised rates of return and real estate security interests, Wheeler converted his clients’ money to his own use, living an extravagant lifestyle he could not otherwise afford and building a large marijuana business.

“Mr. Wheeler had an important fiduciary responsibility to act in the best financial interests of his clients. Instead, he repeatedly lied to and stole from them,” said Billy J. Williams, U.S. attorney for the District of Oregon.

“His theft from two minor children who had recently endured the loss of their father is uniquely cold-hearted. The children’s simple requests for funds to cover routine expenses like braces were met with callous lies. My hope is that Mr. Wheeler’s prosecution and time behind bars will offer some measure of solace to his many victims,” Williams said.

IRS-Criminal Investigation Special Agent in Charge Justin Campbell.added, “As a CPA, Mr. Wheeler presented himself to investors as a reliable financial advisor in order to receive investment funds, and yet he greedily diverted those funds for his own investment interests.

“Additionally, Mr. Wheeler knew his obligation to accurately report income on a tax return, but instead chose to file a false personal tax return to evade his tax obligation,” Campbell said. “IRS-Criminal Investigation will hold accountable licensed CPAs who mislead and violate the trust of the public and the profession for their own selfish interests.”

To carry out his scheme, officials said Wheeler would create limited liability corporations (LLCs) as an investment vehicle on behalf of his clients and name himself a member. He would then open bank accounts for his clients and attempt to gain signing authority so he could transfer funds independently.

One of Wheeler’s first victims was a C Trust or “minor’s trust” established for the benefit of two children whose father died in April 2011. Wheeler was named a trustee of the C Trust and facilitated the sale of the father’s business six months after his death.

Unbeknownst to the children or their representatives, Wheeler used the proceeds to purchase a large residential real estate development in Washington state called Trotter Downs in his own name.

Despite being the primary source of funding to purchase the development, the children were left with no ownership lien on the property. Further, Wheeler repeatedly refused to pay for the children’s expenses, falsely claiming that the funds were frozen because of a lawsuit involving their deceased father.

A second Wheeler victim was a silver medalist for the U.S. Olympic snowboarding team who had created his own line of snowboarding equipment. Wheeler managed to gain signing authority on some of the victim’s bank accounts and made multiple unauthorized transfers of funds to his own accounts. In just two years, Wheeler embezzled more than $962,000 from the athlete victim.

Many of Wheeler’s victims were retirees who entrusted him with their life savings. One retired victim, a former law enforcement officer, invested more $236,000 with Wheeler. Wheeler quickly redirected these funds for his own use. Shortly thereafter, he used $27,500 of the victim’s money to purchase an engagement ring for his fiancé.

In total, between 2011 and 2014, Wheeler defrauded his clients of more than $4.4 million. The government’s financial investigation revealed that within hours or days of receiving client investment funds, Wheeler would redirect the money to various personal uses.

Wheeler spent a large portion of the money he stole from his clients’ investment assets at the Hard Rock Café in Las Vegas, Nevada, at strip clubs, on travel and on expenses related to his marijuana grow operations, prosecutors said. Wheeler is a former part owner of Club Rouge, a strip club in downtown Portland.

U.S. District Court Judge Karin J. Immergut postponed the hearing regarding restitution to his former clients and to the IRS until Jan. 10, 2020.

The government filed a civil forfeiture action on the remaining 25 plots in Trotter Downs that Wheeler had not yet sold. This action prevented Wheeler from continuing to sell off plots for his own benefit.

On May 24, 2018, Wheeler pleaded guilty to one count each of wire fraud and attempting to evade or defeat his tax obligations.

The case was investigated by IRS-Criminal Investigation and the Portland Police Bureau, and prosecuted by Michelle Kerin, Assistant U.S. Attorney for the District of Oregon. The related civil forfeiture case is being handled by Assistant U.S. Attorney Katie de Villiers.

KTVZ 2019

Article Topic Follows: Crime And Courts

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