Misuse of tribal watershed funds results in 18-month sentence

A Fairbanks man will serve 18 months in prison for misapplication of over $300,000 in federal funds belonging to the Yukon River Inter-Tribal Watershed Council.

U.S. District Judge Ralph R. Beistline handed down the sentence on March 1 for David Michael McGraw, 39, of Fairbanks, who pleaded guilty to misapplication of the money and one count of making and subscribing a false return, the U.S. Attorney’s office in Anchorage said.

McGraw paid restitution in full to the council prior to sentencing and was also ordered to pay $40,604 in restitution to the IRS.

Upon completion of his prison term, McGraw will be on two years of supervised release.

According to documents filed with the court, McGraw was the council’s finance director from 2011 to 2014, and during that time the nonprofit corporation received over $3.5 million in federal grants to address health, environmental and safety issues involving the watershed.

The investigation showed that McGraw intentionally misapplied some $315,000 from the council for his personal benefit, for items including purchase and maintenance of an airplane, flight school for himself, the purchase of real estate, firearms and online pornography fees.

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Investigation further revealed that McGraw created two sham corporations to hide his embezzlement, and also file false personal income tax returns which failed to disclose business income he received from this criminal activity, the U.S. Attorney’s office said.

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