Powell Man Sentenced For Fraud, Money Laundering, And Supervised Released Violations

KNOXVILLE, Tenn. - On April 9, 2026, Kenneth Francis Lee, 55, of Powell, TN, was sentenced to 99 months imprisonment by the Honorable Katherine A. Crytzer, United States District Judge, in the United States District Court for the Eastern District of Tennessee at Knoxville. Following his imprisonment, Lee will be on supervised release for 3 years. Judge Crytzer also ordered Lee to pay $7,022,140.12 in restitution to his victims.

As part of the plea agreement filed with the court, Lee agreed to plead guilty to an indictment charging him with one count of wire fraud in violation of 18 U.S.C. § 1343 and one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h).

According to filed court documents, from 2019 through 2024, Lee solicited money from victims to pay for litigation costs associated with the settlement of a purported legal case. There was, however, no such legal case or settlement, and Lee used the funds to support his own lifestyle and an online gambling habit. To conceal the source, control and ownership of the stolen funds, Lee conspired with others to transfer the money between multiple bank accounts.

Prior to committing the crimes leading to his sentencing on April 9, 2026, Lee had amassed earlier federal convictions. The first, in 2010, involved a mortgage fraud scheme that led to his conviction for wire fraud and money laundering. The second, in 2019, involved tax evasion and the failure to file tax returns. Lee committed his most recent offense while still on supervised release following his release from prison for the 2019 offenses.

The sentence imposed by Judge Crytzer consisted of an 87-month sentence for the wire fraud and money laundering convictions along with a 12-month sentence for violating the terms of his supervised release. The court ordered that Lee served the two sentences consecutively.

U.S. Attorney Francis M. Hamilton III of the Eastern District of Tennessee; Special Agent in Charge, Donald "Trey" Eakins of the Internal Revenue Service - Criminal Investigation (IRS-CI); and Special Agent in Charge Terence G. Reilly, of the Federal Bureau of Investigation (FBI) Nashville Division made the announcement.

Lee's criminal conviction was the result of an investigation by the IRS-CI and the FBI.

Assistant United States Attorney Frank M. Dale, Jr. represented the United States.

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