In a sentencing memorandum filed January 2, the United States Attorney’s Office in Washington asked the US District Court for the Western District of Washington to sentence Dickson Lee, the former chief executive of L&L Energy Inc., to 60 months in prison despite sentencing guidelines that recommend 41–51 months.
Lee is awaiting sentencing after pleading guilty to two counts of securities fraud in violation of 18 U.S.C. § 3148. In anticipation of having L&L Energy listed on the NASDAQ exchange, Lee fabricated the existence of a chief financial officer in documents provided to the Securities and Exchange Commission. Furthermore, Lee fraudulently issued shares of L&L Energy to associates in China in the midst of an SEC investigation in order to make it appear that the sales were not directed by the company and to avoid further disclosure requirements.
In requesting the longer sentence, the memorandum states that “the frauds committed by Lee are so brazen and unique, they have no known precedent.” The government also contends that the sentencing guidelines here do not constitute a wholly adequate basis for gauging the extent of Lee’s criminal conduct. The sentencing guidelines, according to the memorandum, are driven by the notion of direct economic loss to the shareholders.
In this case, the government conceded that it could not establish economic loss to investors as a result of Lee’s actions. However, making note of the exceptional nature of Lee’s crime and the heightened need for deterrence in securities fraud cases committed by public companies, the US Attorney’s Office sought the heightened penalty.
U.S. v. Dickson Lee, No. CR 14-0024RAJ (W. D. Wash. Jan. 2, 2015)