SAN JOSE- A California Franchise Tax Board investigation has lead to charges against a South Bay accountant who is accused of taking donation deductions from his charitable foundation to pay for personal expenses, including a luxury condo in Taiwan.
According to a Franchise Tax Board investigation, Jimmy Chen, 62, of Saratoga, set up a foundation to grant scholarships to rural students in Taiwan. The investigation shows that Chen set up the tax-exempt ChenSung Family Foundation in 2004. Other than a single contribution of $250, the ChenSung Family Foundation did not use its funds for any charitable purposes during the investigation period.
Chen allegedly evaded close to $60,000 in state taxes by taking the deductions and filing false returns. He faces six felony counts of tax fraud. If convicted, he faces up to six years and four months in state prison.
According to the Santa Clara County District Attorney's office, in addition to the luxury condo in Taiwan, evidence shows that Chen also spent foundation funds on premiums on a life insurance policy for his wife at the time, and other personal expenses.
Evidence further shows that Chen gave seminars on charitable foundations and helped others to set up foundations similar to his for a fee.
"This type of criminal activity is a huge slap to Californians who are doing their best to earn a living, make ends meet and to pay their taxes," said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona. "It works against our state and all who live here."
Chen was scheduled to be arraigned on August 16, 2016.