Source: www.usdoj.gov\opa\pr\1999\April\137crm.htm

FRIDAY, APRIL 16, 1999

DEMOCRATIC FUNDRAISER INDICTED ON ADDITIONAL COUNTS

WASHINGTON, DC -- The Justice Department Campaign Finance Task Force today announced a forty-seven count indictment against Democratic fund-raiser Mark B. Jimenez for conspiracy, mail fraud, tax evasion, false statements, and the making and concealing of illegal conduit contributions to a number of Democratic campaigns. Jimenez had previously been charged in a seventeen count indictment in Washington, D.C. last September. Those charges are incorporated into the new indictment.

Jimenez, 52, was the Chief Executive Officer and majority shareholder of Future Tech International, Inc., (FTI), a Miami corporation engaged primarily in the business of distributing computer components and peripherals to clients in South America. FTI and Mark Vision Holdings (MVH), a Uruguayan corporation controlled by Jimenez, were the exclusive distributors of computer hard drives manufactured by Quantum, a California corporation.

According to Count One of the indictment, which was filed today in U.S. District Court in Miami, Jimenez, a relative, and several employees of FTI and MVH, were involved in various schemes to defraud the IRS. One such scheme involved the establishment of Kalisol, S.A., a Uruguayan company that purportedly provided marketing services to FTI and MVH. As set forth in the indictment, most of the billings by Kalisol were for services never performed. Jimenez used Kalisol to create false deductions for FTI and to move approximately $5 million of income out of the United States without paying income taxes. Jimenez is also alleged to have defrauded the IRS by taking business deductions for personal expenses, entertainment costs and FTI's contributions to the DNC and to political candidates.

Count One also details a scheme to defraud Quantum by submitting to the company false invoices for advertising expenses that FTI and MVH, in fact, did not incur. According to the indictment, this resulted in more than $600,000 in payments fraudulently obtained from Quantum. Jimenez and others then allegedly took various measures to conceal these schemes from the government in order to obstruct the government's investigation of the matter. This obstruction involved the removal of records, the coordination of false responses, and the use of threats to at least one FTI officer in order to assure that he did not reveal the scheme to the government.

Two counts of the indictment charge Jimenez with tax evasion based on his causing FTI to transfer approximately $5 million to Kalisol through a false invoice scheme, when the money, in fact, was personal income to Jimenez. The indictment alleges that this transfer of money resulted in Jimenez filing false and fraudulent personal income tax returns in 1995 and 1996. Another two counts charge Jimenez with evading corporate taxes due and owing for those years. This was allegedly done by deducting as business expenses false and inflated advertising costs.

Jimenez is also charged with two counts of wire fraud based on the transmission by fax to Quantum of inflated or fictitious advertising invoices.

Jimenez also is charged with conspiring to defraud the FEC and to make false statements. This was allegedly done by the illegal use of corporate money to make campaign contributions to various candidates of Jimenez' choosing. Federal election law prohibits corporations from making campaign contributions. According to the indictment, Jimenez conspired to violate this proscription by using various conduits, including employees of FTI, to make contributions. The conduits were then reimbursed by corporate funds controlled by Jimenez and/or his personal funds. As set forth in the indictment, this interfered with the FEC's effort to report accurately the source of campaign contributions. Jimenez allegedly directed a scheme to conceal this illegal conduct by having his employee conduits write letters falsely stating that they had not been reimbursed for their campaign contributions.

Six counts of the indictment charge Jimenez with causing false statements to be filed with the FEC. This was allegedly done by causing the submission of the names of conduits as donors to various campaign treasurers. The treasurers then reported to the FEC these names rather than the names of Jimenez and/or his companies, which had been the true source of the contributions. The final 32 counts of the indictment charge Jimenez with illegally using conduits to make campaign contributions.

Jimenez is currently believed to be in the Philippines. The Department of Justice will seek his extradition based on the charges contained in today's indictment.

Jimenez is one of sixteen people charged by the Task Force, which was established to investigate allegations of campaign financing abuses in the 1996 election cycle. In addition, FTI itself pled guilty to two counts of tax evasion based on its deduction as business expenses of political contributions. On Feb. 9, 1999, the corporation was sentenced to pay a $1 million fine as well as all back taxes and penalties owed. On March 23, 1999, Juan C. Ortiz, the Chief Financial Officer of FTI, was sentenced to two years probation, $20,000 in fines, and 200 hours in community service for acting as a conduit for an illegal campaign contribution and participating in the reimbursement of eight other conduit contributions.

On December 14, 1998, Johnny Chung was sentenced to probation and 3,000 hours of community service for bank fraud, tax evasion and two misdemeanor counts of conspiring to violate election law. On November 24, 1998, Howard Glicken, a fund-raiser for the Democratic party, was sentenced to 18 months probation, an $80,000 fine, and ordered to perform 500 hours of community service for violating campaign finance laws.

On March 31, 1999, Robert S. Lee was charged in Los Angeles with violating federal election law by giving the Democratic National Committee a $150,000 check drawn from an account funded by a South Korean corporation. On November 4, 1998, Franklin Haney was indicted on more than 40 counts of conspiring with another to defraud the United States by impairing and impeding the FEC and conspiring to violate specific provisions of federal election law. His case is scheduled for trial on June 21, 1999.

On August 5, 1998, the Task Force indicted Yogesh Gandhi on mail fraud charges in San Francisco. A superseding 12-count information filed on March 8, 1999 charged mail and wire fraud, tax evasion, failure to file a tax return and perjury. On July 13, 1998, DNC fund-raiser Pauline Kanchanalak and her business associate Duangnet "Georgie" Kronenberg were charged with conspiring to impair and impede the FEC, and causing the submission of false statements to the FEC. Trial is scheduled for November 1999. Maria Hsia was indicted in Los Angeles on July 7, 1998 on four tax counts. The case is scheduled for trial in May 1999. On February 18, 1998, Hsia was also indicted in D.C. on charges of conspiring to defraud the United States and causing false statements to be submitted to the FEC. On January 29, 1998, Charlie Trie and Antonio Pan were indicted in Washington, D.C. on 15 charges, including obstruction of justice and various crimes relating to campaign financing. Trials in the Hsia and Trie D.C. cases have been postponed pending an appeal of the dismissal of some of the counts in the indictments. Trie was also indicted on November 9, 1998, in Arkansas for obstruction of justice. Trial is scheduled for May 1999.

In 1997, the Task Force obtained guilty pleas from Democratic fund-raisers Nora and Gene Lum, their daughter Trisha, and Michael Brown for illegal fund-raising activities after their cases were referred from Independent Counsel Daniel Pearson.

The charges made by the government are merely accusations. All criminal defendants are presumed innocent until proven guilty.