PRESS RELEASE
March 21, 2002
CONTACT: James K. Vines
United States Attorney
Wendy H. Goggin
Assistant U.S. Attorney
BROTHERS PLEAD GUILTY TO TAX CHARGES
Nashville, TN - March 21, 2002 - James K. Vines, U.S. Attorney for the Middle District of Tennessee, announced that Jongcheon Lee and Jongbeom Lee pled guilty yesterday before U.S. District Chief Judge Robert L. Echols. Jongcheon Lee pled guilty to a two count information charging him with aiding and assisting in the preparation of false tax returns for 1994 and 1995. Jongbeom Lee pled guilty to one count charging him with providing false information to an IRS employee during an audit. Both informations were filed January 18, 2002, and relate to 1994 and 1995 tax returns filed by their parents, Kyomann and Youngsoon Lee.
IRS-Criminal Investigation Special Agent Gary M. Sinclair testified during the plea hearing that the brothers worked for their parents’ dry cleaning business Joy Cleaners in Hermitage, Tennessee. Jongcheon Lee furnished false information to his parents’ tax return preparer which resulted in gross receipts from the dry cleaning business to be understated by $158,943 for 1994 and $199,898 for 1995, for a total tax loss to the government of $84,291.
According to court testimony, Jongcheon Lee admitted that he understated his parents’ tax liabilities because the family was saving money to purchase a new home and cars, and in order to pay off an existing mortgage. Sinclair testified that during an audit of the 1994 and 1995 tax returns, an IRS auditor found substantial deposits into Joy Cleaners’ business bank account in excess of the amount reported as gross receipts on the tax returns. The brothers told the auditor that the excess deposits were loans from relatives and other non-taxable sources, and provided the auditor with false documents in an attempt to substantiate the alleged loans. After obtaining the bank account deposit records, the IRS auditor determined that virtually all the deposits appeared to be customer checks for dry cleaning rather than loans as claimed by the brothers.
Jongcheon Lee faces a maximum sentence of three years imprisonment and a fine of $250,000 on each of the two counts charged. Jongbeom Lee faces a maximum sentence of up to one year in prison and a fine of $100,000. Sentencing is set for June 10, 2002.
This investigation was conducted by IRS-Criminal Investigation. Assistant U.S. Attorney Wendy H. Goggin prosecuted the case for the government.