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Former top Daley aide to plead guilty in embezzlement case

Tribune reporter

A fixture in Chicago’s Chinatown community who was also a onetime top aide to former Mayor Richard Daley is scheduled to plead guilty Tuesday to federal charges he spent more than $5,000 in charity funds on himself and failed to report the money on his taxes, his lawyer confirmed Monday.

Gene Lee, 65, who served for years as Daley’s deputy chief of staff, will plead guilty to embezzlement and tax fraud charges before U.S. District Judge John Darrah, according to his attorney, Anthony Masciopinto.

In a case that escaped public attention, Lee was charged last summer with stealing funds donated to the Chicago Dragons Athletic Association and the Chinatown Summer Fair – two groups that he ran, court records show.

The charges alleged the money was supposed to be used for a basketball tournament and to promote traditional Chinese dancing and music, but Lee instead used it for personal expenses. He then failed to report the money on his 2007 tax return, according to the charges.

Masciopinto said Lee believed that he spent money – including for gas to drive to tournaments and new suits to wear when he was “wining and dining donors” –on legitimate charity-related expenses.

“Frankly, from my perspective it’s a situation where he was inattentive to certain formalities,” Masciopinto said. “He used assets…for personal purposes that he believed were required for his charity work. Had he sought counsel from an attorney or a tax expert this could have been avoided.”

Masciopinto said the government calculated a total of about $90,000 was stolen over a four-year period ending in 2008, but he will argue in a sentencing brief that the actual number was much lower. Preliminary calculations call for a sentencing of anywhere from probation to 2 years in prison, he said.

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