Martial arts schools' top brass charged with tax fraud

Chicago Daily Herald/April 13, 1995
by Laura Janota

The top figures in a nationwide chain of martial arts schools were charged Wednesday by federal authorities with an income tax fraud scam spanning more than 20 years.

Nearly five years after raiding a number of John C. Kim's suburban martial arts schools, authorities said Kim and others skimmed large amounts of cash from operations to buy a Texas ranch, a California home and other assets.

The schools which were particularly popular in the region in the 1970s and '80s allegedly lured students into a martial arts program and charged them hefty fees, from $900 to $18,000 per course, without reporting all of that income.

Force and threats of force also were used as part of the consipiracy, a federal indictment said.

Kim was arrested Wednesday in California. He and 13 others from across the nation are scheduled to be arraigned April 20 in federal court.

Some of the schools were in Elmhurst, Lombard, Naperville, Schaumburg, Villa Park, Glenview and Oak Lawn. They went by various names, including the John C. Kim Style School of Chung Moo Quan and the John C. Kim Style School of Chung Moo Doe.

Most have since closed or are being run by other parties, authorities said.

Other schools were in Texas, California and Minnesota.

The schools had been the subject of a sweeping television investigative report.

The organization also was classified as a cult, with groups like the Cult Awareness Network in Barrington handing out information about questionable techniques allegedly used to lure students into submission.

While there are no charges that the operation itself was a fraud, authorities said Kim and his associates, demanded cash from students for courses, sometimes as much as $18,000 per course.

Meanwhile, they said, only a portion of that cash was reported to the Internal Revenue Service.

Authorities refused to say just how much Kim and his associates are accused of keeping from the IRS. They charge, however, that the conspiracy to avoid taxes was so well-planned that records were destroyed and coded books kept to conceal the scam.

In a prepared statement, U.S. Attorney James Burns called the alleged frauds that began in the 1970s through 1995 "a long-term, systematic and massive effort to thwart and violate the tax laws of this country."

Among those charged with participating in the income tax fraud conspiracy were Kim's "national instructors," who traveled around the country overseeing schools on Kim's behalf, authorities said.

They are Thomas Martin Hnat, 38, of California; Thomas White, 39, of California; Kenneth Krisciunas, 37, of Texas and California; John Liska, 42, of Texas; Frank Kucia, 43, of Minnesota; and Joselito Jakosalem, 40, of Minnesota.

Also charged were Kim's regional instructors, including Nicolas Gallo, 39, of Illinois and Texas; Sante Furio, 38 of California; Thomas McGee, 39, of Florida; and Scott Gigliotti, 35, of Texas.

Instructors Thomas Condon, 38, of Florida; Michael McKay, 34, of Pennsylvania; and Robert Sawinski, 34, of Washington, also were charged.