FOR IMMEDIATE RELEASE CRM THURSDAY, MARCH 5, 1998 (202) 616-2777 TDD (202) 514-1888 CRIMINAL INFORMATION FILED AGAINST JOHNNY CHUNG
The Justice Department's Campaign Financing Task Force filed an information today charging Johnny Chung with using straw donors and his own donations to exceed federal limits in contributing to the Clinton/Gore reelection campaign, and to U.S. Senator John Kerry's 1996 reelection campaign.
Filed in Federal District Court in Los Angeles, the information also charges Chung, 43, with one count each of tax evasion and bank fraud. He is scheduled to be arraigned in federal court at 9:00 a.m. Pacific Time on Monday, March 9 on the 14th Floor of the Roybal Building in Los Angeles.
"This is the Campaign Financing Task Force's third prosecution in five weeks," said Attorney General Janet Reno. "This investigation is moving forward, but we are not going to let up now."
The information charges Chung with violating the Federal Election Campaign Act (FECA) by conspiring to contribute, and causing to be contributed, funds exceeding the statutory limitations on campaign contributions, as well as conspiring to contribute and causing to be contributed funds in the name of others. (18 U.S.C. § 371 and 2 U.S.C. §§ 437g(d), 441a and 441f).
The information refers to two fundraising events, one a Clinton/Gore '96 fundraiser held in Century City, California on September 21, 1995. The second was a September 9, 1996 fundraiser for Senator John Kerry in Beverly Hills, California.
According to the information, Chung attended the Clinton/Gore fundraiser with approximately 20 guests. The cost of attending the event was $1,000, the maximum federal law permitted one person to contribute to Clinton/Gore '96. In order to pay for his guests without appearing to exceed the statutory limitation, Chung used a series of conduit contributors totaling at least $20,000. As explained in the information, he caused one of his employees to recruit conduit contributors by having them write individual checks in the amount of $1,000 payable to Clinton/Gore '96. Chung then caused cash to be withdrawn from his personal banking accounts, and had an employee reimburse the conduit contributors.
The information details a similar scheme to violate the FECA through conduit contributions to the Kerry Committee. The September 9, 1996, Beverly Hills fundraiser for Senator Kerry was hosted by Chung. The federal limit on personal contributions was $2,000 ($1,000 for the primary campaign and $1,000 for the general election campaign). Chung attended the event with several guests. As set forth in the information, Chung contributed $8,000 of his own money disguised as contributions from four of his guests. Chung and one of his employees asked the four guests to write checks drawn on their own accounts in the amount of $2,000 payable to the Kerry Committee. Chung and his employee then reimbursed the four conduit contributors with checks drawn from Chung's personal bank account.
The information also charges Chung with tax evasion. In 1996 Chung filed a personal income tax return stating that his 1995 taxable income was $14,236, and the amount of income tax due and owing was $2,134. In fact, according to the information, his taxable income for 1995 was substantially in excess of that reported. As a result, a substantial additional tax was due and owing. (26 U.S.C. § 7201)
The information also charges Chung with bank fraud. It alleges that around January 1997, in an effort to obtain a bank loan secured by a mortgage on his Artesia, California residence, he engaged in a scheme to defraud the lender. As set forth in the information, Chung transferred his ownership in the residence to his wife, Katharina Chung, who then applied for a loan secured by a mortgage on the residence. The loan application filed by Katharina Chung falsely stated that she was the comptroller of C.M. Information, Inc., a corporation in which Chung was an officer. As set forth in the information, Chung signed the name of the president of the company on the loan application without any authorization to do so. Katharina Chung was subsequently issued a $157,500 loan secured by a mortgage on the Artesia residence. (18 U.S.C. § 1344 , 18 U.S.C. §2 )
On January 29, 1998, Charlie Trie was charged in a 15-count indictment with a variety of crimes related to fundraising activities, as well as with obstruction of justice. Trie returned to the United States and surrendered to federal authorities on February 3, and is scheduled to be tried on October 7, 1998.
On February 18, 1998, a six-count indictment was returned against Maria Hsia, a Los Angeles Democratic fundraiser. Hsia was charged with conspiring with the Hsi Lai Temple of Hacienda Heights, CA by using Temple funds to make illegal campaign contributions to federal, state and local candidates and their political committees. Hsia was also charged with causing false statements to be made to the FEC. Her trial is set for April 27, 1998.
The United States Code provides maximum penalties of thirty-seven years and $1.45 million for the charges Chung faces. Under the federal sentencing guidelines, actual sentences imposed under the law can vary substantially.
All charges made by the government are merely accusations, and all defendants are presumed innocent until proven guilty.