The former tax preparer for the Wirth Cos. has been sentenced to 18 months in federal prison for preparing a false corporate tax return for the fallen commercial real estate firm, which was involved in one of the largest tax conspiracies ever in Minnesota.
Michael James Murry, 61, of Robbinsdale, was fined $50,000 by U.S. District Judge Ann Montgomery in Minneapolis on Friday. He will begin his prison sentence in January. The terms were reached after Murry entered into a plea agreement with federal prosecutors last May.
With more than two dozen family and friends attending court Friday, a tearful Murry apologized for his misdeeds and said, "I do not blame anyone but myself."
Murry has served more than 2,000 clients in the past 38 years as a certified public accountant and tax preparer, but only his dealings with the Wirths were called into question.
His attorney, William Mauzy, said Murry met real estate developer Jeffrey Wirth and his then-wife, Holly Damiami, in 1991 and continued to file their tax returns even as the firm grew "more and more complicated." Murry, who served as the company's primary tax preparer until 2010, "derived no gain from this," Mauzy said.
The Wirth Cos. was involved in developing water parks in Bloomington and Brooklyn Park, as well as the Grand Hotel in Minneapolis.
According to court documents, Wirth and Damiani paid just $7,567 in federal income taxes from 2003 through 2006. Wirth was recently sentenced to 4 1/2 years in federal prison and ordered to pay $6.45 million in restitution after pleading guilty to conspiring to evade paying federal taxes.
Last week, Damiani, who is divorced from Wirth, was sentenced to three months in federal prison after pleading guilty to a single count of filing a false federal individual income-tax return.
Assistant U.S. Attorney William Otteson said Murry's involvement in the Wirth fraud "was critical to helping this go on and on."
In court documents, the government charged that Murry "was well-aware that [the Wirths'] extravagant lifestyle did not match the paltry income figures [Murry] was putting on their tax returns."
But Mauzy wrote in a court brief that Murry twice advised Wirth that he and Damiani's spending of company funds for personal purposes was unsustainable. That advice, documents state, was ignored.
Judge Montgomery noted that it appeared "out of character" for Murry to sign off on the Wirths' false tax returns.
"This is a significant black mark, the only one in what is otherwise a praiseworthy career," she said.
Janet Moore 612-673-7752