Nathan Wheeler, a 43-year-old accountant in Portland, Oregon, who also owns a marijuana business, was sentenced to 51 months in federal prison for wire fraud and tax evasion after embezzling nearly $1 million from an Olympic snowboarding medalist, according to Accounting Today.
Wheeler owned and operated Bridge City Advisors LLC, an accounting firm that offered investment and legal services to clients throughout the Portland area. Prosecutors said he used his position as a CPA to persuade clients to invest in various real estate development projects, but instead of providing the promised rates of return and real estate security interests, he spent his clients’ money on 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,” said Billy J. Williams, U.S. Attorney for the District of Oregon, in a statement. “Instead, he repeatedly lied to and stole from them. 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.”
As part of his scheme, Wheeler would create limited liability corporations 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 his victims was Daniel Kass, 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 Kass’s bank accounts and made multiple unauthorized transfers of funds to his own accounts. In only two years, Wheeler embezzled more than $962,000 from the athlete.
“I was working for the American dream,” said Kass, according to the Associated Press. “But that dream became a nightmare when I met Nathan Wheeler.”
Kass was forced to close the fledgling business after the money was embezzled from him and moved into his mother’s home.
One of Wheeler’s first victims was a trust established for the benefit of two children whose father died in April 2011, according to prosecutors. He was named a trustee of the trust and facilitated the sale of the father’s business six months after his death. But, unbeknownst to the children or their representatives, Wheeler used the proceeds to buy a large residential real estate development in Washington State called Trotter Downs in his own name. Even though they were the main source of funding to purchase the development, the children were left with no ownership lien on the property. On top of that, 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.
Many of his other victims were retirees who entrusted him with their life savings. One of them, a former law enforcement officer, invested more $236,000 with Wheeler. Wheeler quickly redirected these funds for his own use. Soon after that, he used $27,500 of the victim’s money to purchase an engagement ring for his fiancé.
“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,” said IRS-Criminal Investigation Special Agent in Charge Justin Campbell. “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. 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.”
Between 2011 and 2014, Wheeler defrauded his clients of a total 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. He spent much 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. He 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.
“From 2010 through 2015, my word was garbage,” Wheeler said, according to the AP. “I’ll be sorry and ashamed for the rest of my life.”