By James McNair
Enquirer staff writer

A 65-year-old accountant in Symmes Township pleaded guilty in federal court Thursday to shoring up his failing company by illegally skimming loan proceeds from three banks.

The U.S. Attorney's office said John E. Duggan II, the owner of Duggan Financial, pleaded guilty to bank fraud and income tax evasion. He faces a prison sentence of 12 to 18 months in prison - if he helps authorities in their investigation of another, unnamed suspect - $1.25 million in fines, probation for up to five years and restitution of $234,000.

Court papers filed by the government say Duggan fraudulently diverted money from Miami Savings Bank in Miamitown, First National Bank of Germantown, Ohio, and United Bank of Parkersburg, W.Va., between May 1998 and February 2003. Duggan used the loans to buy equipment and lease it to customers at a higher interest rate, but didn't make his monthly bank payments.

The government said the diverted money was used to fund the "lavish lifestyle" of Duggan and his wife. It said he reported a combined $110,853 in income in 1999 and 2000 when he should have reported $350,353, shorting the government $74,397 in income taxes.

Miami Savings Bank reported a loss of $170,000 from its dealings with Duggan, while First National Bank of Germantown said it lost $64,000. Duggan, who was represented by lawyer Glenn Whitaker of Cincinnati, agreed to repay those sums and file amended tax returns.

Duggan has problems on other fronts.

Judgments totaling $37,759 in unpaid sales taxes have been filed against Duggan Financial in Hamilton County Common Pleas Court, along with a judgment for $2,208 in unpaid withholding taxes and debts of $6,950 to the Kohnen & Patton law firm and $5,028 to Pitney Bowes.

American Express also contends Duggan has defaulted on two credit cards with a combined balance due of $74,224, excluding interest.

Duggan, whose accounting registration in Ohio is inactive, did not return a phone call to his office Thursday.

E-mail jmcnair@enquirer.com.