Michael Ernest Monforton Pleads Guilty in U.S. Federal Cour
The United States Attorney's Office announced that during a federal court session in Missoula, on January 19, 2011, before U.S. District Judge Donald W. Molloy, MICHAEL ERNEST MONFORTON, a 51-year-old resident of Bozeman, pled guilty to conspiracy to commit fraud and wire fraud. Sentencing has been set for April 20, 2011. He is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Ryan M. Archer, the government stated it would have proved at trial the following:
Country Classic Dairy (CCD) is a co-op that is based in Bozeman and owned by the dairy producer members. It is governed and operated by a Board of Directors, and the daily operations of the company are overseen by corporate executives.
In 2007-2008, during the times charged in the indictment, MONFORTON was the CEO of the company, Jeff McCown was a manager in the trucking and transportation LLC arm of the company, Jeannette (Jenny) McCown (Jeff's wife) was the bookkeeper and S.M. was the shop manager.
By at least 2007, MONFORTON and the McCowns began to embezzle from CCD by using company funds to purchase goods and services for their own personal use and enjoyment. They used CCD funds to purchase these items without the knowledge or consent of the Board of Directors who governed the company that was supposed to distribute profits to the co-op members. MONFORTON and the McCowns embezzled money in three main ways:
They used their company credit cards to make personal purchases. When the credit card statements came in to the company, Jenny McCown coded them in the company books and records in a way that made them appear to be legitimate expenses.
They used CCD funds to personally reimburse themselves for personal expenditures. They would submit receipts from personal vacations or other purchases and claim them as business related expenses in order to get reimbursed.
They used CCD accounts payable to directly pay vendors for personal goods and/or services. For instance, they would have the vendor submit an invoice to CCD and then claim that it was business related in order to get compensated.
In the end, MONFORTON and the McCown's embezzled over $1 million in CCD funds.
The evidence would have shown that the defendants took clear steps to conceal the true nature of their personal purchases from the Board of Directors through mis-coding and general invoicing. And on other occasions the Board was directly lied to and never informed that CCD funds were used for personal purchases.
Jeffrey and Jeanette McCown pled guilty to federal charges and are awaiting sentencing.
MONFORTON faces possible penalties of 20 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Criminal Investigation Division of the Internal Revenue Service.
A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.