KNOXVILLE, Tenn. (WTVF) — A Powell man has been sentenced to nearly nine years in federal prison after admitting to a yearslong fraud and money laundering scheme that netted more than $7 million from victims.
Kenneth Francis Lee, 55, was sentenced April 9, 2026, to 99 months in prison by U.S. District Judge Katherine A. Crytzer in federal court in Knoxville. He will also serve three years of supervised release following his sentence and must pay $7,022,140.12 in restitution.
According to court documents, Lee pleaded guilty to one count of wire fraud and one count of conspiracy to commit money laundering as part of a plea agreement.
Prosecutors said Lee carried out the scheme between 2019 and 2024, convincing victims to send money for what he claimed were legal expenses tied to a settlement in a supposed case. Authorities said no such case existed, and Lee instead used the money to fund his personal lifestyle and an online gambling habit.
Investigators said Lee worked with others to move the stolen funds through multiple bank accounts in an effort to conceal the source and ownership of the money.
Court records show Lee had prior federal convictions before committing the latest offenses. In 2010, he was convicted in a mortgage fraud case involving wire fraud and money laundering. In 2019, he was convicted of tax evasion and failing to file tax returns.
Officials said Lee committed the most recent crimes while still on supervised release related to the 2019 conviction.
His 99-month sentence includes 87 months for the fraud and money laundering charges, along with an additional 12 months for violating the terms of his supervised release. The sentences will be served consecutively.
The case was investigated by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorney Frank M. Dale Jr. prosecuted the case.
Austin Pollack brings us an update on a remarkable young man facing great odds, and his family has one simple request: pray for Cole. I believe in the power of prayer and hope you'll join me in lifting up Cole and his family.
- Carrie Sharp
