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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of California

FOR IMMEDIATE RELEASE
Tuesday, September 12, 2017

Former Manhattan Beach Executive and SEC Attorney Sentenced to Jail

Assistant U. S. Attorney Rebecca S. Kanter (619) 546-7304

 

NEWS RELEASE SUMMARY – September 11, 2017

 

LOS ANGELES – A Manhattan Beach attorney was sentenced today to nine months in federal custody after being convicted at trial for embezzling over a quarter-million dollars from his former employer, MWRC Internet Sales LLC (“MWRC”), and filing false tax returns. James (“Jim”) Miller, a former regional counsel at the Securities Exchange Commission’s Los Angeles office and former real estate investor, was convicted in June of five felony counts of wire fraud and four counts of filing a false tax return. In addition to serving nine months in jail, the sentence imposed today by Judge George Wu requires Miller to pay the Internal Revenue Service $64,329 in restitution, $900 special assessment, and two years of supervised release.

 

According to the evidence presented at trial, James Miller was the president and co-managing partner of MWRC Internet Sales LLC, an Internet sales company that was founded in approximately 2000 in order to provide manufacturers and local brick-and-mortar retailers a way to share in the profit from online sales. As part of his duties, Miller had check signing authority for MWRC’s business bank account. From January 2009 through October 2012, Miller wrote unauthorized checks to himself, embezzling more than $300,000 from the company. Miller used this money to pay for personal expenses and debts, and did not report it on his personal tax returns for 2009 through 2012, causing a tax loss of approximately $64,000.

 

According to the evidence at trial, Miller’s conduct of writing unauthorized checks was first revealed when Miller and Russell Lesser, Miller’s co-managing partner and MWRC’s primary investor, were preparing annual financial statements in March 2011. Evidence at trial revealed that Lesser allowed Miller, his long-time friend, to continue as co-managing partner of MWRC based on Miller’s promise to never engage in the conduct again and to pay MWRC back the stolen funds. Lesser, who had been loaning Miller $3,000 per month to help Miller in a financially difficult time, continued to provide Miller the personal loan of $3,000 per month, and directed Miller to use that money to start repaying MWRC. Evidence at trial showed that although Miller did stop embezzling money for two months, he began writing checks to himself again in May of 2011 despite his promise to Lesser not to do so.

 

The evidence at trial showed that although Miller did repay MWRC $95,500 between 2009 and 2012 during the course of his embezzlement, he received from Lesser personal loans totaling $108,000 during the same time period. Evidence at trial also showed that Miller falsified MWRC’s check register to hide his criminal conduct. Specifically, evidence at trial showed that Miller made numerous false entries on the check register indicating that checks were transfers to another MWRC bank account (the most common use of the account) when in fact the checks were written to Miller himself and deposited in his own personal bank account.

 

The Court rejected Miller’s request for a sentence of probation based on his community service, noting that “the commission of some good works is not a get out of jail card.”

 

The case was prosecuted by Southern District of California Assistant United States Attorney Rebecca Kanter, acting as a Special Attorney, and Trial Attorney Benjamin Weir of the Tax Division.

 

Southern District of California Acting United States Attorney Alana W. Robinson, stated that “This case was aggravated by the fact that Miller was not only an attorney, but a former regional counsel for the Securities Exchange Commission. Given the defendant’s duty of candor, his numerous outlandish claims during his trial testimony makes this crime particularly offensive. Corporate executives such a Miller should understand that stealing from their employer is not “merely a business dispute,” but serious felony conduct that will be investigated and prosecuted.

 

“Defendant Miller abused his position of trust and continuously lied to his colleagues for personal gain,” said Danny Kennedy, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our federal partners will continue to work together to hold accountable offenders who commit major financial crimes that impact individual businesses and taxpayers.”

 

“Miller allowed greed to color his judgment and now he will be paying the price,” stated IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “Today’s sentencing reinforces our commitment to every American taxpayer to vigorously investigate individuals who line their pockets with fraudulently obtained funds and then file fraudulent tax returns.”

 

DEFENDANT                                            Case Number 14CR0471-GW

James Miller                                                Age: 68           Manhattan Beach, CA

 

SUMMARY OF CHARGES

 

Wire Fraud – Title 18, U.S.C., Section 1343

False Statement on Tax Return – Title 26, U.S.C., Section 7206(1)

 

AGENCY

 

Federal Bureau of Investigation, Los Angeles Division

Internal Revenue Service, Criminal Investigations

 

 

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Topic(s): 
Financial Fraud
Press Release Number: 
CAS17-0911-Miller
Updated September 12, 2017