Portland, Ore. — Lester V. Smith, Jr., 83, the former president and event director of the Portland Marathon, pleaded guilty and was sentenced in federal court today for evading taxes due on embezzled funds from the charitable organization supporting the race since the early 1980s.
Smith received a three-year federal probation sentence, including eight months of home confinement. He has also been ordered to pay $411,279 in restitution to the Internal Revenue Service (IRS).
Before the sentencing, Smith pleaded guilty to one count of attempting to evade and defeat income taxes.
Court documents reveal that for approximately 35 years, Smith served as the president and event director of Portland Marathon Inc. (PMI), a charitable organization responsible for planning and running the Portland Marathon. During his tenure, Smith managed PMI’s daily operations, financial matters, and had sole authorization for expenses paid from PMI’s business bank account.
Between January 2012 and 2017, Smith initiated or directed unauthorized transfers of funds from PMI’s bank account to his personal checking account. He also used PMI funds to pay off personal credit card debts and issued unauthorized checks from PMI made payable to himself. On one occasion, Smith used a PMI check to buy a $60,000 Infiniti sport utility vehicle. Furthermore, Smith used stolen funds to finance home renovations, shopping sprees, home décor, furniture, and other luxury goods and services.
Smith and another individual established a for-profit company called Next Events Productions, LLC to provide consulting services to PMI regarding running events. Between 2012 and 2017, PMI disbursed over $302,000 in payments to Next Events. Subsequent investigations revealed that a substantial portion of these funds was transferred to Smith’s personal bank account from Next Events’ bank records.
Simultaneously, Smith significantly underreported more than $1.2 million in taxable income to the IRS. Despite hiring an accountant to prepare his and his wife’s personal income tax returns for 2012 through 2017, Smith failed to disclose payments received from PMI, the purchase of the Infiniti SUV using PMI funds, or funds received from PMI via Next Events.
On February 17, 2022, a federal grand jury in Portland indicted Smith on seven counts, including wire fraud and attempting to evade and defeat income taxes.