Federal authorities say a former investment adviser bilked an elderly Tacoma man and his estate out of nearly $900,000.
Internal Revenue Service agents arrested Michael D. Montgomery in Aspen, Colo., on Wednesday. Montgomery, 42, made an initial appearance in federal court there Thursday and was released on bail.
He is being investigated for at least six counts of wire fraud and one of filing a false tax return, court records show.
IRS special agent Anne Rueter wrote in a criminal complaint filed last month that Montgomery served as the elderly man’s trustee. The man died in 2006 at age 90.
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Rueter said in her complaint that Montgomery made loans to himself from the man’s accounts but paid back only a fraction.
He also billed the man’s estate for 1,200 hours of work he purportedly performed – charging more than $240,000 – but could not document how he spent his time, court records show.
In all, Montgomery allegedly wrote checks or transferred funds from the man’s accounts to himself or his business totaling $1.2 million. He paid back about $320,000, records show.
Montgomery also failed to report most of the money as income on his federal tax returns, records show.
Montgomery was removed as trustee in 2007.
“The newly appointed trustee, who has worked as a fiduciary in similar capacities since 1993, estimated it would have taken 25 to 30 hours to wrap up the client’s estate,” Rueter wrote. “According to the newly appointed trustee, even a complicated case, which this was not, would have cost $30,000, not hundreds of thousands of dollars.”
Efforts to reach Montgomery for comment were unsuccessful. He contends the money represented fees for his services, court records show.