Bill Mercer, United States Attorney for the District of Montana, announced today that on April 1, 2009, in Billings, after a 1 1/2-day federal district court trial before Senior U.S. District Judge Jack D. Shanstrom, DONALD KEITH FERGUSON, a 49-year-old resident of Fromberg, was found guilty of bankruptcy fraud, obstruction of bankruptcy court proceedings, interference with Internal Revenue Service Laws, and attempt to evade or defeat tax. Sentencing is set for July 1, 2009. He is currently detained.

At trial the evidence showed that FERGUSON had not filed a tax return since 1996. And when he was assessed a tax deficiency for 1998, 1999 and 2000, FERGUSON attempted to pay that deficiency with checks that had been drawn on a bank account he had closed over four years before. FERGUSON never paid off these tax deficiencies and continued to file correspondence with the IRS indicating that he was exempt from levy and that the 1040 form did not apply to him.

After FERGUSON attempted to pay his tax debt with bogus checks in 2002, he also began defaulting on his mortgage payments with Wells Fargo Bank. He filed for bankruptcy in March 2004. Evidence showed that during the bankruptcy proceeding FERGUSON failed to disclose two personal banking accounts in his bankruptcy petition and his meeting of creditors. When these accounts were discovered, he never provided records from these accounts as requested. Documentation introduced at trial showed that over $122,000 in large expenditures was routed through one of these undisclosed bank accounts. Additionally, testimony and documentation illustrated that during the course of the bankruptcy proceeding FERGUSON made misleading statements, omitted facts, and generally frustrated the bankruptcy proceedings by representing that he had a secured lien against himself in the amount of $100,000,000,000, providing evasive and inaccurate accounts of his income, omitting bank accounts, not fully disclosing all of his real property, refusing to accept court orders, and generally making frivolous filings.

FERGUSON faces possible penalties of 10 years in prison, a $250,000 fine and 3 years supervision.

Assistant U.S. Attorney Ryan M. Archer prosecuted the case for the United States.

The investigation was conducted by the Internal Revenue Service.

 

 

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