The former finance director of a Fairbanks, Alaska nonprofit is headed to federal lockup after pleading guilty to misapplying federal funds and filing a false tax return.
David Michael McGraw, 39, of Fairbanks, was sentenced by U.S. District Judge Ralph R. Beistline to serve 18 months in prison followed by two years of supervised release. McGraw pleaded guilty to one count of misapplication from an organization receiving federal funds and one count of making and subscribing a false return.
McGraw paid restitution in full to the Yukon River Inter-Tribal Watershed Council (Watershed Council) prior to sentencing, and was also ordered to pay $40,604 in restitution to the Internal Revenue Service.
McGraw was the finance director from 2010 to 20914 of the Watershed Council, a nonprofit corporation formed to improve and preserve the water quality of the Yukon River and its watershed, according to Bryan Schroder, the U.S. Attorney for the District of Alaska.
During McGraw’s employment as the financial director, the organization received more than $3.5 million in federal grant funds to address health, environmental and safety issues. The investigation showed that McGraw intentionally misapplied approximately $315,000 from the Watershed Council for his personal benefit including, among other things, the purchase of an airplane, maintenance on the airplane, flight school for himself, the purchase of real estate, more than a dozen firearms, and online pornography fees.
According to Schroder, McGraw created two sham corporations to hide the embezzlement, Clear Skies Aviation LLC and Interior Rentals LLC. McGraw used the money he diverted to these corporations to conceal the purchase of an airplane and real estate for himself using Watershed Council funds. Additionally, for the years 2011 to 2013, McGraw knowingly filed false personal income tax returns, which failed to disclose the business income he received from his criminal activity.