The former owner of Foremost Dairies in Spokane has pleaded guilty to evading $642,000 in federal income taxes during the time he operated the company.
Michael C. Cameron, currently living in Florida, pleaded guilty Tuesday in U.S. District Court in Seattle to evading taxes in 1989 and 1990 on more than $1.6 million in taxable income.
Cameron faces up to five years imprisonment and a fine of $250,000. Sentencing has been scheduled for Sept. 8.
In addition, Cameron agreed to make restitution to U.S. Bank of Washington for $2.24 million, the amount of money obtained by Cameron from Foremost’ operating capital before the company collapsed in 1990.
No restitution will be paid to dairy farmers who lost an estimated $2.7 million after Cameron defaulted on loans and a receiver took control of the company.
Cameron had been the target of an Internal Revenue Service investigation after completing a leverage buyout of the Carnation Co. dairy in 1989. Cameron used an $18 million term loan and $7 million revolving credit line from U.S. Bank in the transaction.
Cameron renamed the company Foremost Dairies, with operations in Seattle, Portland and Spokane. The Spokane facility later was acquired by Goodale & Barbieri Cos. It currently operates as Broadview Dairy.
Cameron admitted to skimming $642,000 from Foremost for his personal use and to pay off credit cards. To conceal the scheme, Cameron directed company employees to falsify records, said Pete Lalic, chief of the criminal investigation division for the IRS regional office in Seattle.
Foremost defaulted on its loans to U.S. Bank in 1990 and a courtappointed receiver was installed by the bank to operate Foremost. The receiver refused to pay farmers who had already delivered thousands of gallons of milk to the company for processing.
Mike Yeager, a Deer Park dairyman who led farmers in an attempt to get their money back, said there is no satisfaction in Cameron’s conviction.
“It could happen again.”