CHICAGO—(ENEWSPF)—April 8, 2014. A leader of two Chinatown charitable organizations, GENE LEE, pleaded guilty today to federal charges of theft and filing a false federal income tax return for misappropriating as much as $92,800 from one of the charities, which received federal funds as well as donations, and failing to report and pay taxes on the stolen funds.
Lee, 65, of Chicago, served as chairman of the Chicago Chinatown Summer Fair, which was sponsored and overseen by the Chinese Consolidated Benevolent Association, a charity that received federal funds. He was also president of the Chicago Dragons Athletic Association, which sponsored youth and adult basketball teams, traditional dancing and music, and in 2009 began overseeing the Summer Fair, a single-day event held in July in Chinatown. Between 2007 and 2010, Lee was responsible for soliciting and obtaining donations to the Summer Fair and the Chicago Dragons.
Lee, also a former deputy chief of staff to former Chicago Mayor Richard M. Daley during that time, pleaded guilty to one count each of theft of federal funds and filing a false federal income tax return. He remains free on his own recognizance pending sentencing on Aug. 28 by U.S. District Judge John W. Darrah. Lee faces a maximum sentence of 10 years in prison on the theft count and three years in prison on the tax count, and a maximum fine of $250,000 on each count. His plea agreement provides for an advisory sentencing guidelines range of 18 to 24 months in prison, according to the government’s calculation.
In pleading guilty, Lee admitted that between 2007 and 2010 he took a portion of the donations he solicited for the Summer Fair and used the money for personal expenses. He did so by creating and sending two invoices to donors and sponsors of the Summer Fair, with the second version requesting that all donation checks be made payable to the Chicago Dragons, which facilitated his ability to misappropriate donations to the Summer Fair to his personal use.
Lee admitted that he cashed approximately 161 donation checks, totaling approximately $132,000, at a restaurant and used a portion of these checks for his own use instead of for the benefit of the Summer Fair or the Chicago Dragons. He also used a portion of the cashed checks for legitimate expenses, according to the plea agreement.
In order to hide his theft, Lee admitted that he provided the charity’s accountant with a false expense summary about donations made to the 2008 Summer Fair, including false information that Home Depot and Western Union had donated 3,000 when each company had actually donated $5,000. The false summary also omitted additional donations, including $10,000 from McDonald’s, $5,000 from ComEd, and $3,000 from Nielsen Media. At the same time, Lee maintained a separate spreadsheet of donations that included these contributions to the 2008 Summer Fair.
By the government’s calculations, Lee misappropriated approximately $92,841 and failed to report that amount as income on his federal income tax returns for 2007 through 2010, resulting in a tax loss of approximately $21,177. Lee disagrees with the government’s figures, the plea agreement states.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The City of Chicago Office of Inspector General assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Margaret J. Schneider.
Source: justice.gov
