Cupertino Couple Indicted For Embezzeling Donated Funds
Couple is alleged to have misappropriated over $7 million in religious donations since 2004
SAN JOSE - A federal grand jury indicted Jonathan Chang and Grace Chang last week with conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering and money laundering, announced Acting United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
According to the indictment unsealed late yesterday, Jonathan Chang, 60, of Cupertino, Calif., together with his wife, Grace Chang, 57, engaged in a scheme to defraud a wealthy donor of money intended to support the Home of Christ 4 Christian Church (HOC4), located in Saratoga, Calif. Jonathan Chang, who served as an “elder” responsible for managing the finances of the church, established his own charitable organization with a name similar to the church. He then secretly directed that monthly donations from the donor be wired to his own organization rather than to the HOC4.
Jonathan Chang is also alleged to have solicited funds from the same donor for the stated purpose of acquiring a new HOC4 building. In response to Chang’s requests, the donor provided a $2 million donation and a $3 million loan to acquire the new building. Jonathan Chang and Grace Chang did not disclose the existence of the funds to HOC4. Instead the Changs directed the $5 million to accounts under their control.
In total, between 2004 and January 2016, the defendants are alleged to have obtained approximately $7.4 million in funds from the donor, all of which was intended for HOC4’s use but was instead misappropriated for the couple’s own purposes. The defendants were each charged with one count of conspiracy to commit wire or mail fraud, in violation of 18 U.S.C. § 1349; four counts of wire fraud, in violation of 18 U.S.C. § 1343; one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); and three counts of money laundering, in violation of 21 U.S.C. § 1956(a).
Both defendants were arrested yesterday morning at their home in Cupertino and made their initial appearance in federal court in San Jose before U.S. Magistrate Judge Nathanael M. Cousins. Both defendants were released on bond, pending further hearings. Bail was set at $200,000 per defendant. The defendants’ next scheduled appearance is at 1:30 p.m. on Thursday, February 11, 2016, for identification of counsel and further bond proceedings before the Magistrate Judge Cousins.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face a maximum sentence of 20 years imprisonment and a fine of $250,000 for each violation of 18 U.S.C. §§ 1349 and 1343. The defendants also face a maximum of 20 years imprisonment and fine of $500,000 or twice the value of the laundered funds, whichever is greater, for each violation of 18 U.S.C. §§ 1956(h) and 1956(a)(1)(B). Additional periods of supervised release, fines and restitution may apply. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Amie D. Rooney and David Countryman are prosecuting the case with the assistance of Laurie Worthen and Carolyn Jusay. The prosecution is the result of an investigation by the FBI.