Ex-husband in tax fraud case receives prison time
The ex-husband of a woman who embezzled nearly $13 million from Matthews International was sentenced Monday to 18 months in federal prison for filing false income tax returns in regards to the stolen money.
U. S. District Judge Nora Barry Fischer imposed that term on Gary Mills, 61, formerly of Dubois, after granting a defense motion for a downward variance from the guideline range of 33 to 36 months the prosecution requested.
Mills had been convicted at trial of lying to the IRS about the income of him and his wife, Cynthia Mills, after she had spent years stealing from Matthews. The couple used the money to buy houses, boats, cars and to fund fancy vacations, among other expenses. Cynthia, of Robinson, had been a cashier at Matthews, the North Shore corporation that
makes funeral monuments and markers. She is serving eight years in federal prison.
Mills, who recently bought a house in Mercer County, had argued he didn’t know where all the money was coming from. The government said he knew because he filed joint tax returns for the couple that underreported their income.
A federal jury convicted him of three counts of filing false tax returns for tax years 2013, 2014 and 2015.
Cynthia Mills was convicted of using the stolen money to buy three houses, eight cars, fur coats, handbags and jewelry. The couple also bought two boats, including one that cost $610,000. Gary Mills and his lawyer, Jed Silversmith, argued he thought the money was coming from his wife’s gambling winnings and he didn’t know she was stealing.
A prior IRS review of their finances, however, revealed the agency had sent the couple a notice in 2012 that they owed some $930,000 in back taxes, penalties and interest from the years 2003 through 2007. Cynthia Mills’ thefts began in 1999.
During an IRS audit, Gary Mills submitted documents offsetting gambling winnings with gambling losses of about $100,000 a year from 2012 through 2014, according to the prosecution.
But over that time, prosecutors said, Mills spent roughly $2.7 million on personal items, including the $610,000 boat on Lake Erie.
In court, Mills’ lawyer asked for leniency and said his client had been fooled by his wife. “Cindy lied to Gary,” he said.
He also asked the judge to consider Mills’ “limited academic and cognitive skills” and the fact he “barely graduated” from Langley High School, which he said was not among the city of Pittsburgh’s better schools.
“I would ask the court to show mercy to Mr. Mills,” he said.
For his part, Mills blamed his ex-wife. “She hid these things from me; she hid them from everyone,” he said.
A former UPS driver, he said he’s now working as a bus driver in Mercer County and trying to get his life together.
“It’s been a very hard time,” he said. “I’ve strived to be a good person.”
Assistant U.S. Attorney James Wilson argued for a guideline range sentence, saying Mills falsified the tax returns in a very specific way and knew what he was doing. He said the couple had a combined income from their jobs of about $100,000, yet were able to make such luxury purchases as the $610,000 boat. Mills had argued he was not payingmuch attention to what his wife was doing, but Mr. Wilson said the boat purchase alone belies that contention.
“One doesn’t do that in a fit of inattention,” he said.
Judge Fischer said Mills knew the couple owed at least $2.6 million to the IRS. She rejected Mills’ request for probation but did partially grant the defense request for a variance.