Gambling Addict Embezzles $800,000 From Nonprofit

No prison time for Long Khong, who embezzled $800,000 from nonprofit
By John Ingold
The Denver Post

A man who embezzled more than $800,000 from the Colorado Association of School Executives was sentenced Friday to five years of supervised release but avoided the prison term prosecutors were seeking.

As part of the sentence, Long Khong will not be able to make credit-card charges or obtain new credit cards. He must get a job, build a budget and put at least one-quarter of his salary toward paying full restitution to the association and an insurance company. He must continue with gambling- addiction therapy and he is not allowed to place any bets, including playing the lottery.

Senior U.S. District Judge John Kane didn't sentence Khong to prison, saying that doing so would be "gratuitous and cruel."

The unusual sentence ran against the request of federal prosecutors that Khong be sent to prison. Sentencing guidelines call for imprisonment for a minimum of nearly three years for the type of bank fraud Khong pleaded guilty to.

"His employer had great trust in him," said Assistant U.S. Attorney James Allison. "It's a lot of money taken over a long period of time."

The association, known as CASE, is a nonprofit that provides professional training to school leaders. Bruce Caughey, CASE's executive director, said he was shocked by the sentence. Since the theft was discovered, the association has reduced professional staff by 25 percent and had to cut programs for members, in part because of the missing money.

"It seems to me that the punishment doesn't fit the crime," Caughey said. "I'm almost speechless, to be quite honest."

As part of the plea agreement, Khong admitted to embezzling $815,254 from the school executive association while he worked there as the manager of business services between 2001 and 2008.

In a choked-voice statement to Kane on Friday, Khong apologized to the association, to his family and to prosecutors for having to spend the time pursuing the case.

"I am very deeply sorry," Khong said. "These people put their trust in me, and I betrayed them."

Khong said he spent the money on a gambling addiction and on trips to Thailand to visit his former stepson.

In making the sentence, Kane noted Khong's difficult childhood in Vietnam, where his father was imprisoned for his political affiliations. Court papers say Khong escaped Vietnam by boat as a 10-year-old, then lived for six months in a Japanese refugee camp.

Kane also pointed to the large number of Khong's family members who sat in the courtroom during the hearing, saying that support made it less likely that Khong would re-offend.

When the hearing concluded, Kane had a simple message to Khong: "Go say thanks to your family."