Judge recommends 15 years behind bars for Don Iley fraud case

Don Iley

Don Iley

Don Richard Iley is a free man no more.

The 53-year-old accountant convicted of stealing $11 million from 142 local small businesses was put under federal custody at a sentencing hearing July 13.

Iley pled guilty to fraud in April. He came before Judge Christine M. Arguello on Thursday thinking the price of his crimes could be eight years behind bars.

Arguello had another idea.

She exceeded the maximum prison sentence recommended by U.S. prosecutors by five years, suggesting a 15-year term, and said Iley should pay $9.7 million in restitution.

In a courtroom filled with many of Iley’s victims last week, Arguello said white-collar criminals get off too easy.

“With white-collar criminals, who (do) not impact just one person, but hundreds of people, for millions of dollars, it is often a slap on the wrist,” she said. “So, my view is that the sentencing guidelines are very lax when it comes to white-collar crime, basically because those crimes are committed by educated people.”

Arguello has not sentenced Iley yet. She has instead granted a continuance, postponing the sentencing until July 25 to allow Iley and his counsel, Gary Lozow, time to comment.

Still, the court considers Iley a flight risk. He left Arguello’s courtroom handcuffed, arm-in-arm with U.S. Marshals.

Don Iley pleaded guilty April 18 to wire fraud as well as aiding and assisting in the preparation of false tax returns. Iley and his Centennial accounting firm were forced into bankruptcy more than a year earlier, when customers realized he had been pilfering their money instead of paying their taxes.

Bankruptcy proceedings are ongoing. Court records show the bankruptcy trustee has located Iley expenditures and assets valued at more than $7 million. They range from bank accounts and insurance policies, to personal expenses like Iley’s car and house in Parker, to donations Iley made to his alma mater, Texas A&M University, and his church, Cornerstone. The sum also includes money the trustee says Iley used to pay clients that got hip to his scheme prior to the bankruptcy.

In the hearing last week, Arguello said Iley feigned being “a family man, a churchgoing and law-abiding citizen,” while targeting small businesses he could “snow over.” She said Iley’s victims trusted him as a friend, then he betrayed them.

“Many of his clients had to close their businesses. They became insolvent. Had to dig into their savings or retirement accounts to pay the IRS taxes that they believed had been paid, and the money had been taken from their account, so they are paying twice. They had to make substantial changes to their living arrangements, including downsizing their homes, being unable to retire when they had planned. Some of the victims suffered health problems as a result of the stress. Some remain paying towards those unpaid taxes while attempting to keep the businesses running. And, as indicated today, relationships suffered because that type of financial stress just can destroy a family.”

Arguello also quoted from victims’ written statements at length. One victim said the trauma and financial fallout caused by Iley strained their marriage, gave them nightmares and made them suffer panic attacks. Another slammed the IRS for being “willing to make a deal with a criminal such as Don Iley” while unwilling “to work with me at all on the money I have to repay them.”

While Iley’s victims lost their health and homes, Arguello said, the one-time Parker resident used their money to lead a “lavish lifestyle.”

“He was living in a multimillion-dollar home, traveling with his family, paying for his children’s college and private school tuition, attending football games in box seats, enjoying shows, and spending the victims’ money with no apparent remorse at the time.”

The assistant U.S. Attorney prosecuting the case, J. Chris Larson, in April recommended sentencing Iley to serve between 97 and 121 months.

But Arguello said a higher penalty is necessary because there is “an ongoing need to protect the public” from Iley – especially since he continued to commit fraud after being caught in the act before the 2016 bankruptcy.

Arguello said the steeper sentence could deter other white collar criminals, too.

——

Here are written statements from Iley’s former customers quoted by Judge Christine M. Arguello:

“Don’s choice to steal from us took a tremendous toll on our relationship. The money we had been paying the IRS was to be a portion of our salary. As a result, we could not make payroll and could not pay ourselves our salary. My brother ended up having to sell his home. He quit the family business and  moved away. We have not spoken since. Now I am left alone to care for my elderly parents, causing strain in my marriage. Physically, I am a wreck. I cannot sleep. And my health is deteriorating. It was difficult to focus on my business. I lost sleep from all of the stress and worry. Many days I was so distracted that I had to go home sick. I was depressed, angry, and oftentimes numb from disbelief. Further, I still have nightmares regularly and I believe will not rest peacefully until this is resolved. I have suffered chest pain, multiple panic attacks, nausea, headaches, and severe depression. My quality of life has been extremely compromised.”

“We believe that what has been most frustrating, hurtful, anger provoking, is the loss of the precious time this has caused, having so much more to wade through and figure out. Time away from our daughters, who albeit are young adults, still enjoy time with their parents. The bitter pill to swallow is the time it has robbed from Eve, that is the wife’s, aging parent. She is the only child living close to them. Her mother is the sole caretaker for her father, who suffers from dementia. But the time demands of additional work to remedy this situation, and taking on additional hours for financial reasons, has not allowed her to spend the time with her dad as he rapidly slips away or to offer her mom the break she needs and deserves.”

“Don Iley was always so nice and also a client of my tree care company. It is his intentional deception that angers me so much. He put on a facade, and meanwhile he was stealing from me the whole time…I now owe the IRS $1,066 per month for 3 years. This payment is huge for me and will hinder the growth of my business. With this money I could have bought new equipment and hired a few more workers. Now I have this payment to repay taxes that I have already paid but were knowingly stolen by Don Iley. The Federal Government has never reached out to me personally to ask how this crime has impacted me and my business. The IRS is not willing to work with me at all on the money I have to repay them. But the IRS is willing to make a deal with a criminal such as Don Iley, who has wrecked a lot of lives. This makes me extremely angry at the system. I am being penalized for Don Iley’s criminal activity, and that is unfair and unjust.”

Don Iley

Don Iley

Don Iley

Don Richard Iley…

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Philip Perington
4 years ago

The Judge has it half right. Don Iley should be forced to serve a very lengthy sentence and repay his innocent victims until the day he dies or pays them back. However, by certifying Iley as a registered Agent with the authority of the IRS to collect tax payments, the IRS is just as culpable. Iley’s Clients trusted him because they thought he represented the IRS. Sadly and cruelly, the IRS now uses their power to intimidate and stridently threaten prosecution against unsuspecting taxpayers for doing what they thought was correct and lawful. The other criminal in this case is… Read more »

Phil Bicking
Phil Bicking
4 years ago

He stole 11 and they found 7 which works out to net $1,000,000 per year for 2011-2015.

Why isn’t Transamerica Financial Advisors being investigated as a likely source to find the stolen money?
He was listed as a registered representative for the firm.

What, he embezzled but was too ethical to launder?