Friday, March 25, 2005

Dunkin’ Donuts store owner
must post $250,000 bond

Prosecutors allege that
he possessed a false passport
and violated tax laws

A federal magistrate has released Dunkin' Donuts franchisee owner Kenneth Iong pending trial on charges he filed false income tax returns during a three-year period.

But U.S. Magistrate Kevin Chang echoed the government's concern that he is a flight risk and ordered Iong to post a $250,000 bond -- of which $100,000 must be in cash or property -- to ensure his appearance at trial.

He also ordered Iong to surrender any passports he owned and comply with an electronic monitoring program and curfew restrictions.

Among the charges Iong faces in an 11-count indictment is that he possessed a false passport.

According to federal prosecutors, Iong admitted that while on a business trip in 2003, he accepted an offer from an individual in Hong Kong to buy a Costa Rican passport for $9,000. The passport would have a bogus name with Iong's picture. Iong said he flew back to Hong Kong to pick up the bogus passport when it was ready.

After a while he wondered whether the passport would work, so he purchased travel tickets to fly to Las Vegas and on to Los Angeles under the phony name, said Assistant U.S. Attorney Leslie Osborne.

From Los Angeles, Iong displayed his phony passport and flew to China and used it to gain entry. It was not until he flew to Japan that officials there discovered the passport was fraudulent. He was denied entry and expelled after he declared himself to be a U.S. national living in Honolulu.

In an interview by Immigration agents, Iong denied being under investigation by federal authorities. Osborne said Iong should have known by October 2003 that he was under investigation because the Internal Revenue Service had contacted his employees and business associates about him.

Iong's immigration attorney later told federal investigators that Iong had obtained the Costa Rican passport here, not in Hong Kong.

Osborne questioned why Iong has been liquidating all assets in his own name or transferring them to his corporation if he is not intending to flee. "We believe there is a very real danger of flight here," Osborne told the court.

Defense attorney John Edmunds said Iong obtained the passport in 2003 and that it has since been confiscated. Iong was aware of the investigation against him and would have been gone by now if his intention was to flee, he argued.

Iong has until April 7 to post bond.

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