Ex-Daley deputy chief of staff gets probation for charity theft

Former Mayor Richard M. Daley’s deputy chief of staff was spared a prison term Thursday for stealing nearly $100,000 from a Chinatown charity.

Gene Lee — a 65-year-old Chinatown leader who for years was an aide to Daley — was instead sentenced to five years probation by U.S. District Judge John Darrah, who said Lee’s 40 years of devoted community service counted in his favor.

Dozens of Chinatown residents who’d packed Darrah’s courtroom to show their support for Lee erupted in cheers and applause as the sentence was announced, prompting a stern rebuke from the judge.

Lee himself had bowed to the judge and each corner of the courtroom in a traditional show of respect and contrition before apologizing for the thefts he said had caused him “guilt and shame and my public humility.”

He plead guilty to embezzlement and tax fraud in April, admitting that he cashed 161 large charity checks at a Chinatown restaurant then kept part of the money for himself.

Though the exact amount Lee used for his own benefit is disputed, prosecutors say that in a single year, 2008, he took more than $26,000 of the $38,000 donated to his charity, the Chicago Dragons, and used it for suits, shoes, ties and fancy dinners.

Lee admitted he hid the true size of donations given by Home Depot and Western Union from the accountant of another charity he headed, the Chinese Consolidated Benevolent Association, and that he failed to report a $10,000 donation from McDonald’s, a $5,000 donation from ComEd and a $3,500 donation from Nielsen Media.

Only a portion of the donations received in 2007 and 2008 were used for their intended purpose of funding a basketball tournament and traditional dance events at the summer fair.

At his sentencing hearing Thursday, his attorney Anthony Masciopinto compared him favorably to billionaire Beanie Baby creator Ty Warner, who was spared prison earlier this year for a tax fraud conviction thanks to his many charitable acts.

Lee’s four decades of community work were more admirable because “he’s not a billionaire,” Masciopinto said.

Prosecutors argued that prison time was necessary to deter other would-be embezzlers.

Darrah agreed that crimes like Lee’s are “easily committed, hard to detect and even harder to prosecute,” but said the 147 letters sent in Lee’s support was the most he’d ever seen in his career, describing the case as “extraordinary.”

He ordered Lee to repay the money he stole, and to do 240 hours of community service as part of his sentence.

“You made a very serious mistake,” he told Lee, before adding that his lifetime of service in Chinatown is “something that cannot be taken away.”

Masciopinto said Lee, who served in the Army during the Vietnam War and formed the Chicago Dragons upon his return, intends to remain active in community organizations but that it was not clear in what role.