Financial advisor likely headed to prison for tax evasion

Millegan, 65, agreed to spend 51 months in prison and pay back $4 million to investors and the IRS, according to a sentencing agreement filed in federal court. A judge is scheduled to rule on the agreement on April 3 in a Portland courthouse.

Millegan, through his son Quinn Millegan, declined to comment.

James Millegan was convicted in November 2022 of tax evasion. He faces additional charges of wire fraud, but those will likely be dismissed as part of the sentencing agreement, according to court documents.

Millegan had been listed as an advisor on the 2,800-acre Pegasus Equestrian Resort & Venue, and was a large presence as the family pushed for its approval in early 2021. He was the director of business development for Pegasus and spoke on behalf of the project during public presentations and interviews with the media.

Pegasus won initial county approval for the resort project, slated for a spot near Metz Hill Road west of Interstate 5. Brothers Drew and Quinn Millegan are the owners of the proposed development. Their company, Millegan Brothers LLC, is based in McMinnville.

Quinn Millegan said his father “has no financial or ownership interest whatsoever in Pegasus.” He also said, “Pegasus continues to move forward on the project.”

The Millegan brothers have said Pegasus Equestrian Resort & Venue would bring in an estimated $130 million a year in revenue, provide 500 permanent jobs and bring as many as 5,000 people to events. Plans call for five indoor arenas, outdoor grass and sand arenas, a driving course, a cross-country course and four full-size grass polo fields. The project also includes a 150-room hotel resort and spa facility with restaurants, meeting rooms and convention facilities.

The Millegans estimated they would contribute $800,000 a year to the county in property taxes. Construction was scheduled for late 2022, but a court case over ownership of the property has caused delays.

They were set to take ownership of the property in December 2021, but the deal hit a snag. In January 2022, Drew and Quinn Millegan filed a lawsuit in Douglas County Circuit Court claiming breach of contract. They are seeking to get the land or be compensated monetarily for damages.

A jury trial has been tentatively set for October.

Pegasus prevailed in an appeal filed by the group 1,000 Friends of Oregon. The Oregon Court of Appeals upheld a decision by the Oregon Land Use Board of Appeals, which had upheld Douglas County’s approval of the Pegasus project.

James Millegan was still listed, as of Friday, as a member of the project team on the Pegasus website, along with his photo.

Prosecutors said Millegan evaded $2.5 million in taxes by hiding his income in multiple bank accounts and submitting false financial statements to the IRS from 2009 to 2016. Millegan transferred nearly $4 million to a half-dozen bank accounts under his control, prosecutors said. He used the money to support an expensive lifestyle that included a $4.5 million home in Portland, a $1.3 million home on the Oregon coast, and a 1938 Rolls Royce, which he spent $800,000 to restore, according to court documents.

Millegan agreed to pay back $2.5 million to the IRS and just under $1,5 million to a dozen former clients.

Quinn Millegan said none of that has any bearing on the Pegasus project.

“JW has no financial or ownership interest in Pegasus and his situation has no impact to the Pegasus development,” Quinn Millegan said. “Just because he is our father, whose advice has been valuable both personally and professionally, does not mean that he has any financial/ownership interest in it, nor that his situation has any impact on Pegasus. To group both matters together as if they are directly related is extremely misleading.

“All of our partners and accredited investors are fully aware of JW’s situation. As a family, we are an open book. I will also note that none of our investors are in Douglas County.”