By Alexander Dworkowitz
Joseph Liu, the father of Flushing’s new councilman, was sentenced to a month in jail and six months of home detention Tuesday for misapplying $1 million in funds from the Great Eastern Bank in Flushing that he helped to establish.
Three other founders of the bank also received light sentences from the judge in federal court in Brooklyn.
Faced with jail terms ranging from 30 to 57 months based on federal guidelines, neither Liu nor the other three men got a sentence of more than eight months in prison. Two were given no prison time at all.
Liu, a Bayside resident and the father of newly elected Councilman John Liu (D-Flushing), also was sentenced to three years of supervised release during which he must perform 300 hours of community service per year by U.S. District Court Judge Edward Korman.
He gave Long Fong Chen of Flushing the harshest sentence of eight months of imprisonment, three years of supervised release, and a $30,000 fine.
Schuman Tu of Whitestone and Wen Chen of Bayside each were given three months of home detention and two years of probation during which they must serve 200 hours of community service per year.
The four men were convicted in February of three counts of misapplication of bank funds, making false entries in bank records and conspiracy to commit these offenses, according to the U.S. attorney’s office for the Eastern District of New York.
Korman said extenuating circumstances for each of the defendants accounted for the light sentences.
He noted that the frailty of Joseph Liu’s wife, Jamy, who suffered a stroke before the beginning of the trial, prevented him from imposing a long sentence.
Long Fong Chen’s sentence was reduced because of his charity work, said Korman.
The judge said Wen Chen and Tu were less culpable than Long Fong Chen and Liu and thus not deserving of jail time.
According to the criminal complaint, the four men founded Great Eastern Bank in 1986, served on its board of directors and also were partners in Seven Giants Properties, Inc.
The original complaint said Seven Giants was put in charge of constructing the Great Eastern headquarters at 41-48 Main St. in Flushing. In January 1990, the men approved a 30-year-lease of the property that included a separate, untitled agreement in which Great Eastern gave Seven Giants $1 million to reimburse the landlord for improvements, the U.S. attorney said.
“Most of the $1 million was then distributed directly to the 10 owners of Seven Giants, including the defendants,” the complaint said.
Before Liu’s sentencing, his lawyer, Jerry Bernstein, described the importance of Liu to his wife, given her medical condition.
“In the morning he gets up, he dresses Mrs. Liu,” said Bernstein. “He comes back from work at lunch, makes her lunch.”
Korman then asked him if he wanted to make any comments.
“I’m very sorry for what happened,” said Liu. “I never intended to harm the bank.”
As Korman paused before sentencing his father, John Liu sat motionless with his head bowed.
After the sentencing, John Liu said his father was the most honest man he had ever met.
“I’m very disappointed,” said John Liu. “The verdict I believe was completely wrong.”
John Liu said his father would look into appealing the verdict.
Although his lawyer, Stuart Grossman said he though the sentence was fair, Tu said he also planned to appeal the verdict.
“I was the one most opposed to it,” said Tu, about the transaction between Great Eastern and Seven Giants that led to the convictions.
Long Fong Chen and Wen Chen, who were the second and third to be sentenced, left the courtroom before the elder Liu was sentenced and could not be reached for comment.
While Liu and Tu may appeal the verdict, Assistant U.S. Attorney Jonathan Sach, who prosecuted the case, said he was considering appealing the sentencing.
Although at a previous hearing Korman said the defendants had worked to repay some of the money to the bank, he said Tuesday he did not take the repayment into consideration in the sentencing.
Korman said their work to keep the bank financially healthy was not as important as the fact that the bank was put in jeopardy in the first place.
“If in the end the bank fails, it’s the government that gets left holding the bag,” said Korman.
Reach reporter Alexander Dworkowitz by e-mail at Timesledger@aol.com or call 229-0300, Ext. 141.
