June 17, 2003

OFFICE OF THE UNITED STATES ATTORNEY
SOUTHERN DISTRICT OF CALIFORNIA
San Diego, California

United States Attorney
Carol C. Lam

For Immediate Release

NEWS RELEASE SUMMARY

Carol C. Lam, United States Attorney for the Southern District of California, and Eileen J. O'Connor, Assistant Attorney General for the Tax Division, Department of Justice, announced that Ken Appel pled guilty to filing a false U.S. Individual Income Tax Return for 1998 before the Honorable Irma E. Gonzalez in United States District Court in San Diego, today. Ken Appel owns and operates KB Books, a college bookstore with locations at San Diego State University, Mesa College, and City College.

According to court documents, Ken Appel also filed U.S. Individual Tax Returns for 1996, 1997, 1999, and 2000 that falsely understated his total income for those years. Ken Appel admitted his conduct of understating his income from 1996 through 2000 resulted in his failing to pay over $324,000 in federal income taxes. As part of his guilty plea, Appel agreed to pay $200,000 to the Department of Treasury as a deposit against his civil income tax liability.

Defendant Appel's sentencing will be before Judge Gonzalez on September 29, 2003 at 9:00 a.m.

DEFENDANT

Ken Appel
San Diego, California

SUMMARY OF CHARGES

Title 26, United States Code, Section 7206(1): Subscribing and Filing a Materially False Income Tax Return.
Maximum sentence: Three years in prison and fine not to exceed $250,000.

AGENCY

Internal Revenue Service, Criminal Investigation