Former Oregon securities broker who evaded over $2.5 million in taxes sentenced to 51-month federal prison term

Lavish lifestyle included $4.5 million Portland home, beach house, Rolls Royces and Bentleys

PORTLAND, Ore. (KTVZ) —A former Oregon securities broker was sentenced to more than four years in federal prison Monday for willfully evading payment of more than $2.5 million in personal income taxes and using the excess cash to fund a lavish lifestyle.

James W. Millegan, also known as JW Millegan, 65, of McMinnville, was sentenced to 51 months in federal prison and three years’ supervised release. Millegan was also ordered to pay more than $2.5 million in restitution to the IRS and more than $1.4 million to 12 former clients.

“Tax evasion is a crime of greed that trivializes the duty all Americans share to pay their taxes. We take these crimes seriously and will continue working with our partners at the IRS to hold criminal tax evaders accountable,” said Ethan Knight, Chief of the Economic Crimes Unit for the U.S. Attorney’s Office.

“It’s been said that the difference between tax avoidance and tax evasion…is the thickness of a prison wall. Mr. Millegan is learning that firsthand today,” said Bret Kressin, Special Agent in Charge of the IRS Criminal Investigation (IRS:CI) Seattle Field Office. “While everyone is entitled to use legal means to reduce their tax liabilities, Mr. Millegan actively attempted to evade his taxes for many years. Instead of paying his fair share, Mr. Millegan lived lavishly at the expense of honest taxpayers. Today, he is answering for those crimes.”

According to court documents, Millegan owned and operated J.W. Millegan, Inc. (JWMI), a small, commission-based investment advisory business that served clients in the Portland and Salem areas.

From 1996 to 2016, the investment firm was Millegan’s only significant source of income. Millegan closed JWMI at the end of 2016, in part because a Financial Industry Regulatory Authority (FINRA) arbitration panel determined he had churned the investment accounts of several clients and fined him $450,000. Millegan filed for Chapter 13 bankruptcy almost immediately.

Over a seven-year period from July 2009 through September 2016 while operating JWMI, Millegan evaded payment of $2.5 million in income taxes due from 2006 through 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.

Millegan was described as a prolific spender by personal assistants hired to pay his bills. He used the proceeds of his tax evasion 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, Oregon, Rolls Royce and Bentley automobiles for everyday use, equestrian expenses like stabling and lessons, and an attempt to establish Wallace Bridge, a world-class equestrian competition center and resort near Sheridan, Oregon.

In 2003, Millegan bought a classic 1938 Rolls Royce Phantom III touring car at a classic car auction. From 2004 to 2006, while owing hundreds of thousands of dollars in past due taxes, Millegan spent $800,000 restoring his Phantom III, including shipping it to a restoration specialist in the United Kingdom, so that he could show it at classic car shows. In 2006 and 2007, Millegan paid to show his Phantom III at multiple premier car shows in the United States, United Kingdom, and Europe.

To evade the payment of his taxes, Millegan concealed his income from the IRS by transferring it to six bank accounts he controlled, including transferring $1.4 million to the bank account of his deceased mother’s trust, which he used to pay his personal expenses. From July 2009 through September 2016, Millegan transferred $3.7 million to these accounts. To further conceal his income, Millegan submitted false financial statements to the IRS.

On November 21, 2019, a federal grand jury in Portland returned a 13-count indictment charging Millegan with tax evasion and investment churning. Later, on February 17, 2022, he was charged by superseding indictment with wire fraud and tax evasion.

On November 14, 2022, Millegan was convicted at trial on one count of tax evasion.

This case was investigated by IRS:CI. It was prosecuted by Seth D. Uram and Meredith D.M. Bateman, Assistant U.S. Attorneys for the District of Oregon. Assistant U.S. Attorney Hannah Horsley assisted the trial team.