Estes Park resident Timothy A. McPhee, 64, pleaded guilty Thursday to conspiracy to defraud the United States, tax evasion, and wire fraud.
McPhee agreed to pay more than $48 million in restitution to the Internal Revenue Service. He faces a maximum penalty of five years in prison for conspiring to defraud the United States, five years for tax evasion, and 20 years for wire fraud. A court date for sentencing has been set for Oct. 23.
The former plumber and business owner, along with “at least four other co-conspirators,” conspired to violate the law, intended to evade payment of a substantial amount of income tax, and used interstate or foreign wire communications to use “false or fraudulent pretenses, representations or promises” to investors.
According to the plea agreement, McPhee promoted and implemented an investment scheme, and more than 200 taxpayers nationwide became clients in the tax shelter investment plan.
The tax shelter resulted in a loss to the United States of millions in unpaid federal income taxes by clients of his investment company. McPhee also used the tax shelter to conceal more than $5 million in personal income earned from 2016 through 2021, on which he did not pay approximately $1.8 million in federal income tax.
McPhee’s actions “involved a multi-tiered structure typically consisting of three trusts and a charitable foundation. The trusts were successively layered, meaning that each trust named the next trust in the series as its beneficiary,” the plea agreement document says.
The scheme involved filing fraudulent 1041 tax forms so clients could “whittle down…their business income to $0 to avoid paying taxes on that income.”
McPhee and Larry Conner, from Frisco, Texas, promoted the scheme by distributing promotional materials, conducting seminars, and having private conversations where McPhee explained how clients could avoid paying taxes on up to 98% of their income using the trust system as a tax shelter.
In September 2023, a federal grand jury in Denver indicted McPhee and Conner on charges of conspiring to defraud the United States and aiding in preparing false income tax returns. McPhee and his spouse, Marcia Predmore, were also charged with evading their personal federal income taxes.
In April 2024, a superseding indictment was returned charging Predmore and three others with allegedly conspiring with McPhee and Conner to promote, sell, and implement an abusive trust tax shelter scheme.
A superseding indictment in December 2024 charged McPhee with 12 counts involving wire fraud, aiding and abetting, conspiracy to commit wire fraud, and money laundering.
McPhee’s bond was revoked in February 2025, and he was remanded into custody. Predmore’s trial date is set for 2026.
McPhee moved to Estes Park from Michigan with his parents, Dave and Judy McPhee, in the early 1980s. His father went into partnership with Eddie Rowe of Rowe Heating in 1983. The company became McPhee Plumbing and Heating in 1987. McPhee worked with his father and became the company owner. In 2000, McPhee became the owner of Protech Plumbing and Heating, which acquired Timberline Mechanical and McPhee Plumbing and Heating. In 2016, McPhee sold Protech to Joel Delia.