Director of Cedar Rapids nonprofit skimmed donations to support 'sex addiction'
Jon Petersen pleads to filing false tax returns
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A director of a local non-profit corporation admitted Monday in federal court to diverting over $114,000 in donations to his personal bank account to keep up with his costly “sex addiction.”
Jon S. Petersen, 55, pleaded guilty to one count of filing a false 2013 tax return in U.S. District Court. He faces up to three years in prison, a $250,000 fine and restitution, which will be determined at sentencing.
During the plea hearing, Petersen admitted to filing a fraudulent income tax return for 2013. He didn’t include as income the donations he diverted from World Ambassadors Ltd. into his personal checking account.
World Ambassadors is a charity organization that provides international students with housing. The nonprofit was created in 1993, according to the Iowa Secretary of State website.
The plea agreement shows Petersen admitted he used about $114,581 of those funds for his own personal use, which would be considered taxable income for him.
Petersen claimed to struggle with a sex addiction from 2005-2015, prosecutors said. Petersen would pay for this addiction through his credit cards, home equity lines of credit, and World Ambassadors’ donations.
The number of contributors to World Ambassadors from 2010-2014 ranged from 31 to 38 people, according to the U.S. Attorney’s Office. From January 2010 through December 2014, the nonprofit received total deposits of $476,466. Of those deposits, $475,555 was deposited into Petersen’s personal checking account either by bank transfers or checks payable to himself from that account. U.S. District Court Judge Leonard T. Strand released Petersen on bond pending sentencing which hasn’t been set at this time.