Husband of woman who embezzled $13 million from North Side firm found guilty of lying to IRS
A federal jury in Pittsburgh found a Clearfield County man guilty of lying to the Internal Revenue Service about his income while he and his wife blew millions of embezzled dollars on luxury boats, cars, designer handbags, vacations and gambling, federal prosecutors said Friday.
Gary E. Mills, who resides in DuBois and has ties to Robinson Township, Allegheny County, is husband of Cynthia A. Mills — the former cashier who pleaded guilty two years ago to embezzling nearly $13 million since 1999 from Matthews International, a monuments and engraving firm based in Pittsburgh’s North Side.
She was sentenced to just over eight years in prison in September 2017.
The trial for Gary Mills began last month.
Following three weeks of arguments and testimony, a jury of nine men and three women deliberated for less than three hours, U.S. Attorney Scott Brady said.
They determined Mills was guilty of three counts of filing false tax returns.
Brady said in a statement that anyone who lies about their income on their taxes effectively is stealing “from the citizens of Western Pennsylvania who work hard and play by the rules.”
“My office is strongly committed to promoting compliance with federal tax laws, and will draw on all available law enforcement to identify, prosecute and punish tax cheats,” Brady said.
Guy Ficco, Special agent in charge of the IRS Criminal Investigations Unit, said the verdict “should also be a message to others who may be considering not reporting all of their income and paying their fair share of taxes that they, too, could face criminal prosecution by doing so.”
Prosecutors had told jurors that in 2014 and 2015, Gary Mills filed false joint tax returns and knowingly under-reported his and his wife’s income.
Cynthia Mills was convicted of embezzling more than $12.9 million between 1999 to 2015, including more than $4 million between 2012 and 2014, prosecutors said. She pleaded guilty in March 2017 to three counts of wire fraud and one count each of mail fraud, tax evasion and engaging in monetary transactions in criminally derived property.
According to prosecutors, the scheme involved cashing checks made out to Matthews or having them routed to a bank account of a bogus company she controlled.
She was accused of using embezzled money to buy three homes, eight cars, motorcycles, fur coats, jewelry and Louis Vuitton handbags.
The defense for Gary Mills argued during his trial that he “allegedly believed the monies came from gambling,” prosecutors said.
But in April 2012, the IRS sent the couple a notice of deficiency stating that they owed at least $930,000 in back taxes, penalties and interest stemming from the years 2003-07.
While litigating the civil audit, Gary Mills “offset gambling winnings with gambling losses” of about $100,000 a year from 2012-14, prosecutors said.
Over the same period, Gary Mills spent about $2.7 million on luxury items — including a $600,000 yacht, other recreational boats and vehicles and “lavish vacations,” prosecutors said.
U.S. District Judge Nora Barry Fischer scheduled his sentencing for Dec. 12.
He faces up a possible maximum sentence of up to nine years in prison and a fine up to $750,000.
Assistant U.S. attorneys Shardul Desai and James Wilson prosecuted the case with help from the IRS and U.S. Postal Inspection Service.
Natasha Lindstrom is a Tribune-Review staff writer. You can contact Natasha at 412-380-8514, [email protected] or via Twitter .