Calling his actions those of “greed not need,” U.S. District Judge Regina M. Rodriguez sentenced Timothy Allen McPhee of Estes Park Tuesday morning to 151 months in federal prison for promoting an illegal tax shelter to taxpayers across the country from 2018 through 2023.
The tax shelter consisted of a private foundation and three trusts. McPhee coached some 200 investors on how to use the accounts to evade paying federal income taxes.
McPhee pleaded guilty in August to concealing more than $5 million in income from the Internal Revenue Service, using an abusive tax shelter, cheating the federal government out of collecting more than $43 million in federal income taxes owed by hundreds of taxpayers, and running a multimillion-dollar Ponzi scheme.
McPhee has been in custody since February, when his bond related to his indictment for tax evasion was revoked due to the filing of new charges for wire fraud and money laundering.
According to victim statements read at the sentencing hearing, McPhee was a con artist who misled his victims into borrowing against their homes, withdrawing funds from their retirement savings plans, and running up credit debt to invest in the fraudulent scheme. The government’s sentencing statement said, “Put simply, McPhee is a serial fraudster.”
An attorney for the government argued that McPhee’s actions had irreparably harmed others. The sentencing memo asked that the court sentence McPhee to 151 months in federal prison, a three-year term of supervised release, restitution to the IRS in the amount of $45,797,569 plus interest, restitution to the victims of the investment fraud scheme in the amount of $6,656,231, an order of forfeiture, and a $35,000 fine.
McPhee’s attorneys asked the court to consider that McPhee was a 64-year-old man with no prior criminal history and requested a downward variance of 95 to 105 months from the government’s sentencing recommendation.
In an effort to seek a more lenient sentence, testimony presented on McPhee’s behalf argued that he had a generous nature and had been involved in civic philanthropy over the years. One of his attorneys told the court that McPhee was a Boy Scout. Since his incarceration in February, McPhee has reportedly been a model prisoner who has offered his skills as a plumber to help repair things in the prison, mentored other inmates, and served as a peer counselor for inmates on suicide watch.
Before becoming involved in the investment fraud scheme, McPhee had owned Protech Plumbing and Heating in Estes Park since the early 1980s.
Two of McPhee’s 200 victims spoke before Rodriguez handed down the sentence. One man said he hoped McPhee would spend the rest of his life in jail and never see the light of day again.
Appearing in court in a khaki-colored prison jumpsuit and shackles, McPhee’s voice cracked as he spoke on his behalf, apologizing for the harm he caused and asking the court for leniency. His attorney stood by his side to help him turn the pages of his written statement as he wore handcuffs.
Rodriguez remanded McPhee to the custody of the Federal Bureau of Prisons.
Members of his family, including his wife, Marcia Predmore, and friends from Estes Park, were in the courtroom. Several wiped tears, and one man buried his face in his hands during the two-hour-long court proceeding.
Predmore and three others, Roderick Prescott, Suzanne Thompson, and Weldon Wulstein, are also under indictment as co-conspirators. Currently, the trials are scheduled to take place in April.