The Santa Clara District Attorney’s Office announced the arrest of a 62-year-old man who was suspected of running a non-profit agency in which the suspect had filed false tax returns. According to Major Fraud Unit Deputy District Attorney Vonda Tracey, “A South Bay accountant faces felony tax evasion charges for taking donation deductions from his charitable foundation that did not serve its purpose.”
According to the complaint the suspect set up a foundation to grant scholarships to rural students in Taiwan. However, the Franchise Tax Board began an investigation into Jimmy Chen, of Saratoga, for failing to file $60,000 in state taxes owed by the suspect after he had filed a false return.
Tracey said, “He used the charitable foundation funds to pay personal expenses, including a luxury condo equipped with a karaoke room.”
According to court documents Chen faces six felony counts of tax fraud. A conviction could land him in in prison for up to six years.
“Tax evasion undermines the fairness that is important in our community’’ prosecutor Vonda Tracey said. “The District Attorney’s Office proactively pursues these types of cases.”
During the investigation it was clear that Chen had set up the tax-exempt ChenSung Family Foundation in 2004. During that time a single contribution of $250 was issued under the ChenSung Family Foundation title. This was the only donation recorded in that time.
Evience collected during the investigation shows that Chen had spent donations on a luxury condo in Taiwan. Also at the time he had paid premiums on a life insurance policy and other expenses for his then wife. According to Tracey, “Evidence further shows that Chen gave seminars on charitable foundations and helped others to set up the foundations similar to his for a fee.”
The District Attorney’s Office is asking that if anyone has further information regarding this case to please contact Deputy District Attorney Vonda Tracey at 408-792-2580.