The former chief financial officer of Barrett Business Services Inc., James Miller, was sentenced to jail time Friday in U.S. District Court in Tacoma.
The Washougal man was sentenced to 15 days in federal prison for falsely certifying the Vancouver company’s 2013 annual report.
According to a Friday statement from the U.S. Department of Justice, Miller made accounting entries that understated how much workers’ compensation expenses had increased. Instead, he attributed $12 million of workers’ compensation expense to payroll taxes and other costs, the department said.
Miller served as CFO at BBSI from 2008 to 2016. The company provides human resource services to other businesses. One of its services included calculating and paying workers’ compensation obligations for customers.
“The entries were deliberate — you knew what you were doing,” Chief U.S. District Judge David Estudillo said during Miller’s sentencing. “We have to be able to rely on the fact that financial statements are accurate.”
Miller, 61, pleaded guilty in November after years of shareholder litigation and a Securities and Exchange Commission fraud investigation. Miller was fired in 2016 for admitting to falsifying the company’s books.
According to the justice department, the amount of workers’ compensation money paid was a “key indicator in assessing the company’s expenses.”
“As a former auditor and CPA, Mr. Miller understood the importance of accurately disclosing financial information,” said Tessa Gorman, acting U.S. attorney. “Nevertheless, he made fraudulent entries 29 times, totaling over $12 million.
“He ‘cooked the books’ and then certified the financial reports as accurate — keeping shareholders and company executives in the dark about the fraudulent entries for three years,” Gorman added.
According to the justice department’s statement, Miller had directed a staff accountant to initial each fraudulent entry, making it appear as if the staff accountant had added it.
The department said the former executive also sold $2.4 million worth of stock in a matter of days in 2013. This was as he prepared the false accounting entries, according to the justice department.
The case was investigated by the Federal Bureau of Investigation and prosecuted by assistant U.S. Attorney Seth Wilkinson.
