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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of California

FOR IMMEDIATE RELEASE
Friday, December 11, 2020

Cupertino Man Sentenced To Four Years In Prison For Embezzling More Than $7.5 Million In Church Funds

Church Elder Ordered to Pay $11.7 Million in Restitution to Victims

SAN JOSE - Jonathan Chang, an elder at a South Bay church, was sentenced to 48 months in prison for stealing more than $7.5 million in donated funds intended for the church, announced United States Attorney David L. Anderson and Federal Bureau of Investigation and Special Agent in Charge Craig D. Fair.  The sentence was handed down by the Honorable Edward J. Davila, United States District Judge.

The sentence follows a guilty verdict after a five-week trial in United States District Court.  The evidence at trial demonstrated that Jonathan Chang, 64, of Cupertino, California, 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, California.  Chang, who served as an elder responsible for managing the finances of the church, furthered his scheme by creating entities with names similar to the church.  He then directed more than $6.7 million from the donor to his own organizations rather than to the HOC4.  In addition, Chang embezzled more than $750,000 from HOC4-related bank accounts in his scheme to defraud.

The jury concluded that Chang solicited funds from the wealthy donor for the stated purpose of acquiring a new HOC4 church house and conducting missionary work.  In response to Chang’s requests, the donor provided $2.25 million in one-time donations, a $3 million loan to acquire the new building, and approximately $1.5 million total in monthly donations.

Chang did not use the funds as intended and directed by the donor.  Instead, he personally enriched himself with the money.  For example, Chang used the funds to make all-cash purchases of multiple houses for himself in the Bay Area, to purchase luxury vehicles, to obtain 15 timeshare interests, to invest in commercial real estate, and to pay for his health insurance and athletic club dues.  The evidence also showed that Chang purchased a home in Fremont with the donor’s funds and then leased the house to one of the donor’s companies, thereby personally collecting rent on a house purchased with stolen funds the donor earmarked for the church.  Similarly, Chang purchased another home with donor funds intended for religious purposes but ultimately rented the home to his son and collected the rent.  With an average annual salary reported as $65,000, Chang purchased millions of dollars in real property, owned a Mercedes, and lived a luxurious life.  In total, between 2004 and January 2016, Chang obtained more than $7.5 million in funds from the donor and HOC4.

The evidence at trial demonstrated that Chang created fraudulent entities to conceal the wire fraud scheme and forwarded the funds to a variety of bank accounts he controlled before spending the money on personal purchases and investments.  Documents submitted in connection with the sentencing established that Chang was able to buy three additional houses with over $1.6 million in a money laundering scheme that involved transferring funds back to the United States from overseas bank accounts.

When discussing the reasons for imposing the 48-month prison term, Judge Davila made clear that Chang’s decade long scheme was an “enormous betrayal” of his church and his community.

On February 4, 2016, a federal grand jury indicted Chang and his wife, Grace Chang, 60, charging each 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).  The jury found Jonathan Chang guilty of all the wire fraud and money laundering counts.  The jury did not reach a verdict as to the two charged conspiracy counts, nor did the jury reach a verdict as to the counts filed against Grace Chang.

In addition to the prison term, Judge Davila also ordered Jonathan Chang to serve a three year term of supervised release to begin after the prison term.  He was also ordered Chang to pay $11,701,262 in restitution to his victims and to forfeit his interest in five real properties which will result in a forfeited amount of at least $8,841,749.

Assistant U.S. Attorneys Patrick R. Delahunty and Sarah E. Griswold are prosecuting the case with the assistance of Susan Kreider. Assistant U.S. Attorney David Countryman assisted in the forfeiture.  The prosecution is the result of an investigation by the FBI.

Topic(s): 
Financial Fraud
Updated December 11, 2020