Computer tycoon William H. Millard, who left Saipan in 1990 owing millions of dollars in taxes to the CNMI government, has been located living in the Cayman Islands, in the Caribbean.
The Wall Street Journal reports, in its Sept. 10 edition, that a New York law firm, Kobre & Kim, retained by the administration of CNMI Gov. Benigno Fitial in 2010 to track down the elusive Millard, has found him living in Grand Cayman. Whether a $34 million federal court judgment against him, obtained in the U.S. District Court for the Northern Mariana Islands in 1994, can be collected remains to be seen. Interest and penalties have pushed the debt amount to over $118 million. The judgment has also been filed in the federal courts of Florida and New York.
Millard, now 79, was the founder of the Computerland retail chain, the largest in the country in the ’70s and ’80s. He sold his interest in the company in 1987, about a year after he and his wife moved to Saipan. They lived a lavish lifestyle in the CNMI, building an elaborate “castle” of a house which was never finished. He was, along with Hillblom, the most famous of the tax immigrants who moved to Saipan to take advantage of a generous tax code in the early days of the commonwealth.
According to the Wall Street Journal article, Millard angered some local officials by complaining, in a speech to business leaders, “that certain officials were always asking him for bribes.” He left Saipan in Aug. 1990, and disappeared. He did pop up here and there, in Switzerland, Ireland, Hong Kong, but by the time CNMI officials got word of where he was, he was already somewhere else.
The cash-strapped CNMI government is expected to pursue Millard aggressively to collect the money he owes the commonwealth. But it won’t be easy. The article says Millard scattered his assets in various countries and in dozens of accounts. He also reportedly gave up his U.S. citizenship, becoming a citizen of Ireland.
An attorney who worked for Millard for many years says he never received any tax due claim or court judgment, and says Millard always paid his taxes in the CNMI faithfully. He suggests commonwealth officials changed their tax laws in an effort to hook Millard for even more.
‘Success’
The successful “pursuit” of Willard represents his administration’s steps to increase government revenues, according to Gov. Benigno R.Fitial.
Proceedings have been initiated in the U.S. District Court here against Millard and his wife, Patricia.
In a joint statement yesterday, Fitial and Lt. Gov. Eloy S. Inos said “this tax collection effort against the Millards represents another step we have been taking to increase revenues through enforcement of long-standing tax claims.”
In an email interview, Press Secretary Angel A. Demapan said the administration hopes to “maximize its effort to collect what is owed to the government.”
Asked if the tax claims against Millard can help ease the government’s financial crisis, Demapan said only when the government’s full effort in collecting unpaid taxes is accomplished “we can discuss the next steps to follow.”
Whether this is a time of hardship or not, the Millards owe the CNMI government money, Demapan said.
“Moreover, this is a very complex case and there is no telling at this point how soon we can see the culmination of this pursuit. We will take this case one careful step at a time,” he said.
Fitial said the Millards’ ComputerLand Corp. owned a chain of retail computer stores in the CNMI. The couple briefly resided in the islands and during those times “they sold their interests in ComputerLand for over $200 million.”
The Millards claimed use of the reduced income tax rate available to CNMI residents so they could lower the tax on gains from the sale of their company’s stock.
However, commonwealth law “specifically precludes” the use of the reduced income tax rate on assets acquired prior to residency.
In July 1994, the NMI government obtained judgments against Mr. Millard in the amount of $18,317,980.80 and against Mrs. Millard in the amount of $18,318,113.41 for a grand total of $36,636,094.21.
With the accumulation of statutory interest the total has increased to $118,043,535.
Fitial said: “The reduced tax rate available in the commonwealth is designed to facilitate investment; not avoidance of liability that occurs prior to establishing residency. The Millards should have paid the initial $36 million in income tax liability when they realized the gain on their stock sale; instead they chose to ignore the tax authority of the commonwealth.”
The governor added, “We have been trying to enforce this liability, but until recently, we were unable to identify the location of the Millards. The commonwealth intends to enforce the tax delinquency assessment that was established in 1991 against all of the property of any nature belonging to Mr. and Mrs. Millard.”
Fitial said the CNMI government has requested the assistance of the Caymans Island government in the enforcement of the commonwealth’s tax claim.
In the past 24 months, Fitial said. “we have been able to bring in an additional $50 million by pursuing tax claims that had been dormant for many years.”
