Mar.30, 2010, 10:18 p.m.

TACOMA, Wash. — A 41-year-old Marco Island man who bribed an insurance adjuster and bilked a Washington insurer out of millions has been sentenced to four years in federal prison and ordered to pay his victims $4.9 million in restitution.

Donald Chill, who purchased his Hull Court home in 2007 for $1.785 million, also must forfeit the waterfront home he lives in with his wife and two sons, ages 5 and 6, because it was purchased with dirty money.

“Committing federal crimes like this is a sure ticket to a federal prosecution,” IRS Special Agent Dan Wardlaw, a spokesman for IRS criminal investigations in Washington, said Tuesday.

A day earlier, at a hearing in U.S. District Court in Tacoma, Wash., Judge Benjamin Settle imposed the prison term and also ordered Chill to serve five years of supervised release for mail fraud, bank fraud and money laundering. He also ordered him to pay restitution of $3.227 million to Mutual of Enumclaw and $1.7 million to Wachovia Bank and the U.S. Small Business Administration, which provided loans to an Oregon man who purchased Chill’s Washington-based emergency home repair company.

In a sentencing memorandum, Assistant United States Attorney Kurt Hermanns asked the judge to impose a 4¾-year term.

“Greed is the motivation for many fraud cases,” Hermanns wrote. “In this case, Mr. Chill’s greed was extreme. He was not satisfied to merely steal some $3.2 million in insurance payments, he also decided to sell the business at a falsely pumped-up price for the purpose of another round of theft.”

In his sentencing memorandum, Chill’s defense attorney, Robert Chadwell of Seattle, urged the judge to impose a term below sentencing guidelines recommending 4¾ years. He cited Chill’s history of asthma and gout and noted he is in remission for Hodgkin’s Disease. He also placed part of the blame on a broker and attorney who assisted Chill in selling his company.

“Don relied on these professionals completely and followed their advice, even when then counseled him to conceal the full terms of the purchase and sale agreement from the SBA and Wachovia,” Chadwell wrote. “Don now fully realizes how mistaken this advice was and he acknowledges that he should have acted against their guidance.”

Chadwell urged the judge to consider that Chill accepted responsibility for his actions and cooperated with the government in the criminal case, as well as civil attorneys.

In a letter to the judge, Chill explained that he expected to “freeze up” and be overcome with emotions at sentencing, so he urged him to consider his letter, which expressed his guilt and remorse over what he’d done. He said he’d confessed what he’d done to Pastor Ken Chickk and the congregation at The Fisherman’s Home Church in Naples.

“It has been a blessing in order to have some time to think and meditate on what I did,” Chill wrote in his three-page letter. “I feel no matter what other people do around me, I am responsible to make the right decisions. If I had not sold my company and there was not an investigation, I would still be doing things that got me where I am now.

He said he was urged not to mention finding God, but said religion helped change his life and he praised his wife for telling him to put everything in God’s hands.

In October, Chill pleaded guilty to mail fraud involving the insurer, bank fraud for defrauding Wachovia Bank and the U.S. Small Business Administration, and money laundering for falsifying records to sell his disaster recovery company and using those ill-gotten gains to buy his Marco home.

He’d faced up to 20 years for mail fraud, 30 years for bank fraud, and 10 years for money laundering, as well as $1.25 million in fines for mail and bank fraud, and anywhere from $250,000 to double the value of his home for money laundering — converting illegal or dirty money into funds or assets that appear to have come from legitimate or clean sources.

Under the plea deal, federal documents show, he admitted his Washington-based company, Charles Prescott Restoration, submitted inflated billings for emergency repairs for homes and businesses covered by Mutual of Enumclaw, sold his company for $4 million without disclosing the fraud, and converted that money into his waterfront home.

Court records show:

From 1995 to 2007, Chill was the owner and sole shareholder of Charles Prescott Restoration, which worked primarily for Mutual of Enumclaw in Enumclaw, Wash. Chill’s company responded to damaged sites, made emergency repairs and then submitted proposals for repairs.

A computer program authorized by the insurer included a 20 percent profit and overhead for contractors. But as early as 2004, Chill inflated estimates for repair work and invoices he mailed to the insurer by padding bills from subcontractors or submitting forged secondary estimates that appeared to be from competitors.

In just 10 jobs over five years that were scrutinized by investigators from the IRS and the SBA Office of Inspector General, Chill overbilled roughly $3.2 million. In one case, he submitted an $84,000 bill for nonexistent electrical repairs.

In May 2007, Chill sold his company to Matthew Smith Co. of Portland, Ore., and certified that his company books and records were true and correct. Neither Wachovia, which financed the sale, nor the SBA, which guaranteed the loan, knew of the false billing scheme and would never have approved the $1.8 million loan to purchase the business.