CEO Lee Lands 5 Years for L&L Energy Stock Scam

SEATTLE, WA – Dickson Lee, 66, the former CEO of Tukwila-based L&L Energy Inc., will spend the next five years in federal prison after being sentenced today in U.S. District Court for two counts of Securities Fraud. U.S. District Judge Richard A. Jones also imposed a $10,000 fine and three years of supervised release, delivering a harsh rebuke to the executive who systematically deceived investors and regulators.

The scheme, uncovered by federal investigators, centered around L&L Energy, a company that once traded on the NASDAQ and claimed to be involved in coal mining, washing, and distribution within the People’s Republic of China. Prosecutors detailed how Lee falsified reports submitted to the Securities and Exchange Commission (SEC), most notably fabricating the existence of a Chief Financial Officer (CFO). This wasn’t a simple oversight; Lee allegedly paid a woman tens of thousands of dollars to remain silent about refusing the position, further obscuring the company’s lack of proper financial oversight. He then lied *under oath* during a subsequent SEC investigation about her role.

The deception didn’t stop there. In 2011 and 2012, facing mounting financial pressure and an existing SEC investigation, Lee secretly issued 730,000 shares of L&L stock to individuals in China. These shares were then sold on the market, generating revenue for the cash-strapped company – all without proper disclosure to shareholders or the SEC. Lee knowingly bypassed established investment channels and ignored warnings from his own Board of Directors, who advised against issuing stock without full transparency. He then falsified accounting records to cover his tracks, claiming the shares were issued as compensation for services that were never rendered.

“Investors rely on the representations made by publicly traded companies, both in accounting records and their filings with regulators such as the Securities and Exchange Commission,” stated Acting U.S. Attorney Annette L. Hayes. “Mr. Lee’s fabrications about key facts concerning his company undermined one of the foundations of our capital markets. That is what he has been held to account for today.” Judge Jones echoed that sentiment during sentencing, stating the case should send a message: “if you engage in deceit and false representations… there will be severe consequences.”

Federal investigators say Lee’s actions weren’t just about financial gain; they were a deliberate attempt to manipulate the market and conceal the true state of L&L Energy. “This case should serve as a warning to those out there who think that rules don’t apply to them, who let their greed outweigh their obligation to the public trust,” said Special Agent in Charge Frank Montoya, Jr., of the FBI’s Seattle field office. “Those people should know the FBI is deeply committed to protecting the community against those who would violate that trust.”

Prosecutors argued in their sentencing memo that Lee’s “flagrant and repeated” attempts to circumvent corporate safeguards were particularly egregious, demonstrating a complete disregard for the integrity of the financial system. The five-year sentence, coupled with the hefty fine, signals a clear message to other corporate executives: fraudulent behavior will be met with swift and severe punishment. The SEC investigation that initially flagged these issues remains ongoing, and further fallout for L&L Energy is expected.

RELATED: Loan Shark Lands 5.5 Years in Federal Lockup

RELATED: “K Money” Crumbles: Wall St. Pretender Admits $2M Scam