Scott Michael McCown Sentenced in U.S. District Court

The United States Attorney’s Office announced that during a federal court session in Missoula, on June 7, 2011, before U.S. District Judge Donald W. Molloy, SCOTT MICHAEL McCOWN, a 38-year-old resident of Bozeman, appeared for sentencing. McCOWN was sentenced to a term of:

Probation: four years with six months’ home arrest

Special Assessment: $100

Restitution: $8,309

Fine: $5,000

McCOWN was sentenced in connection with his guilty plea to attempted tax evasion.

In an Offer of Proof filed by Assistant U.S. Attorney Ryan M. Archer, the government stated it would have proved at trial the following:

McCOWN was employed by Country Classic Dairies, Inc. (Country Classic) in Bozeman from 2003 until January 2009. Country Classic is a co-op owned by its dairy producer members, governed by a board of directors and operated on a daily basis by corporate executives.

In January 2009, Country Classic discovered that several corporate managers had embezzled money from the company. Michael Monforton, Jeffrey McCown and Jeanette McCown have all admitted their roles in the embezzlement, pled guilty and been sentenced to a variety of offenses in this case. The group embezzled funds from Country Classic in several different ways—including the purchase of personal items on company credit cards, submitting personal expenses for reimbursement by the company, and using the accounts payable process to conceal additional personal purchases.

Investigation revealed that McCOWN benefitted from the embezzlement scheme by making personal purchases which were later represented as legitimate business expenses. Although benefitting from the scheme, he received the least amount of proceeds out of others involved. As a result he was contacted early in the investigation and agreed to cooperate. McCOWN told investigators that he was aware that he had taken unauthorized funds from Country Classic during his employment. He also told investigators that the funds he embezzled represented income to him and the funds should have been reported on his tax return.

However, the proceeds of the embezzlement that McCOWN received were not reported on his tax return. In the 2008 tax year, McCOWN filed a joint federal income tax return with his wife. He reported a total income based only on his and his wife’s salaries. The return did not include the value of the goods he received as a result of the embezzlement scheme. These goods comprise income to McCOWN in the year of the embezzlement.

In all, McCOWN failed to claim $50,378.06 in income received during the 2008 tax year, which results in $8,309 of tax that is due and owing.

The investigation was a cooperative effort between the Federal Bureau of Investigation and the Criminal Investigation Division of the Internal Revenue Service.