CHICAGO, Dec. 9 -- Martial arts master John C. Kim and four associates Monday were found guilty by a federal jury in Chicago of tax fraud and skimming the profits from a nationwide chain of schools they operated. The verdicts came after an 11-week trial in which prosecutors painted Kim, a 63-year-old Korean immigrant, as a systematic tax cheat who milked a cult-like following of students for money. The five men convicted Monday, plus six others who pleaded guilty before the trial, were accused of failing to pay millions of dollars in income taxes on millions more that they skimmed from the schools as profits between at least 1977 and 1995. At various time during the 18-year period, the defendants operated more than 30 martial arts schools nationwide, mainly in Illinois, Minnesota, Texas, California and Massachusetts. They operated under the names John C. Kim School of Chung Moo Quan and John C. Kim Style School of Chung Moo Doe. Convicted along with Kim, most recently of LaJolla, Calif., were Frank Kucia, 45, of Encinitas, Calif.; Joselito Jakosalem, 41, of Maple Grove, Minn.; Thomas Condon, 40, of Largo, Fla.; and Michael McKay, 35, of Pittsburgh. A mistrial was declared in cases against Thomas White, 41, of Oakland, Calif.; and Robert Sawinski, 36, of Bellevue, Wash. U.S. Attorney for Northern Illinois James Burns said the case was among the biggest incidence of tax fraud ever prosecuted in Chicago. 'The evidence demonstrated that Kim had a large group of loyal followers who believed that Kim was their spiritual leader as well as a master of physical martial arts movements,' Burns said.
'Witnesses testified that, as part of the conspiracy, Kim administered loyalty tests to some of his instructors in which he forced them to choose between leaving the martial arts schools and death.' Burns said Kim would begin choking the instructors, only to stop at the last minute and say they 'passed' the test. Burns also said the schools charged students as much as $70,000 for courses, and asked that they pay in cash. Only a portion of the money was deposited and taxed, with the rest used by Kim to buy large tracts of property inNaperville, Ill., Texas and LaJolla. Prosecutors asked that Kim's bond be revoked, and their request was granted by trial Judge James Holderman.