PRESS RELEASE
CONTACT: James K. Vines
United States Attorney
Wendy H. Goggin
Assistant U.S. Attorney
BROTHERS SENTENCED ON TAX CHARGES
Nashville, TN - June 11 , 2002 - James K. Vines, United States Attorney for the Middle District of Tennessee, and Clayton L. Cooper, Special Agent in Charge for IRS-Criminal Investigation Nashville Field Office, announced that brothers Jongcheon Lee, 29, and Jongbeom Lee, 31, were sentenced today by Chief U.S. District Judge Robert L. Echols for income tax violations. The Lees were each sentenced to five months imprisonment followed by home detention of five months and each was fined $5,000. Following their term of imprisonment, the court ordered supervised release of two years for Jongcheon and one year for Jongbeom. The court also ordered them to transfer their ownership interest in a $570,000 strip shopping mall they co-own with their parents within 30 days in order to prevent them from placing this asset beyond the reach of IRS.
The brothers, who helped operate their parents’ dry cleaning business, Joy Cleaners in Hermitage, Tennessee, pled guilty on March 20, 2002, to separate income tax violations. Jongcheon pled guilty to two counts of aiding and assisting in the preparation of false tax returns for tax years 1994 and 1995. Jongbeom pled guilty to one count of providing false information to an IRS employee during an audit. The violations related to the 1994 and 1995 tax returns filed by their parents, Kyomann and Youngsoon Lee. Jongcheon Lee admitted during his plea hearing that he understated the business’ gross receipts by $158,943 and $199,898 during 1994 and 1995, respectively.
IRS-Criminal Investigation Special Agent Gary Sinclair testified during the plea hearings that Jongcheon admitted that he understated his parents’ tax liabilities because the family was saving money to purchase a new home and cars and to pay off an existing mortgage. Sinclair testified that during an audit of the 1994 and 1995 tax returns, the IRS auditor found substantial deposits into Joy Cleaners’ business bank account in excess of what was reported as gross receipts on the tax returns. Both of the brothers told IRS auditors that the excess deposits were loans from relatives and other non-taxable sources and provided auditors with false documents in order to substantiate the bogus loans.
This investigation was conducted by IRS-Criminal Investigation. Assistant U.S. Attorney Wendy H. Goggin prosecuted the case for the government.