Husband and Wife Arrested For Fraud, Money Laundering, And Tax Offenses

KNOXVILLE, Tenn. – On August 8, 2024, a federal grand jury in Knoxville returned a 14-count indictment against Kenneth Francis Lee, 53, and Susan Amie Lee, 54, of Knoxville, TN.  Kenneth Lee was indicted on seven counts of wire fraud, one count of money laundering, and three counts of tax offenses, in violation of 18 U.S.C. §§ 1343; 1956(h), 26 U.S.C. §§ 7201 and 7203.  Susan Lee was indicted on three counts of money laundering offenses, in violation of 18 U.S.C. §§ 1956/1957.  Kenneth and Susan Lee appeared in court today before the Honorable Judge Debra C. Poplin, United States Magistrate Judge and entered pleas of not guilty to the charges in the indictment.  Trial has been set for October 22, 2024, before the Honorable Judge Thomas A. Varlan, United States District Court Judge in United States District Court, in Knoxville, Tennessee.

The filed indictment alleges that from March 2019 through August 8, 2024, Kenneth Francis Lee executed a scheme to defraud investors and obtain funds by falsely claiming that Lee was in litigation to sell a company to a large U.S. based investment firm.  Victims wired funds to Kenny Lee for “legal fees” to help procure the settlement funds.  In exchange, the victims were promised a percentage of the sale proceeds.  The indictment alleges that there was no settlement and Lee used the funds for personal expenses, including funding his gambling habit.  It is further alleged that Kenneth Lee did not report any of this income to the Internal Revenue Service (IRS), despite being required to do so.  Susan Lee, for her part, is alleged to have assisted in collecting the fraud proceeds into accounts in her name and then spending those funds.             

U.S. Attorney Francis M. Hamilton III of the Eastern District of Tennessee, IRS Supervisory Special Agent Meredith Louden, and Federal Bureau of Investigation (FBI) Special Agent in Charge Joseph E. Carrico made the announcement.             

If convicted, Kenneth Lee faces a maximum term of 20 years in prison, a fine, restitution, forfeiture, and a maximum five-year term of supervised release for the fraud and money laundering offenses, and a maximum term of five years imprisonment, a fine, a term of supervised release and restitution.  Susan Lee faces a maximum of 20 years in prison, a fine, or twice the amount involved in the money laundering transactions, forfeiture, and a maximum term of supervised release of three years.

This indictment is the result of an investigation by IRS Knoxville and FBI Knoxville. 

Assistant U.S. Attorney Anne-Marie Svolto will represent the United States. 

Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.

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