PORTLAND, Ore. — The former president and event director of the Portland Marathon was sentenced to three years federal probation and ordered to pay $411,279 in restitution to the IRS on Tuesday for evading taxes on more than $1 million he stole from the nonprofit organization that plans and operates the race, the U.S. Attorney's Office for the District of Oregon reported.
Lester "Les" Smith, 83, who now lives in Texas, was indicted and charged with seven counts of wire fraud and tax evasion on Feb. 17, 2022. That indictment came four years after a settlement with the Oregon Department of Justice over alleged conflicts of interest and improper loans.
Before Tuesday's sentencing, Smith pleaded guilty to one count of attempting to evade and defeat income taxes. As part of his plea agreement, the other charges, including wire fraud, were dismissed, a spokesperson for the U.S. Attorney's Office told KGW.
Smith's sentence of three years federal probation includes eight months of home confinement.
From January 2012 through 2017, Smith made or directed others to transfer money from Portland Marathon Inc.'s (PMI) bank account to his personal checking account. Smith also paid personal credit cards with PMI money and wrote checks from PMI to himself, the U.S. Attorney's Office said.
In his role, Smith had sole authority to approve expenses from the organization's bank account, the U.S. Attorney said.
Smith used marathon funds to buy a $60,000 Infiniti SUV, and used stolen money to remodel his home and buy luxury items on expensive shopping sprees. The 2022 indictment alleged that Smith stole more than $1 million from PMI.
He also "substantially underreported more than $1.2 million in taxable income" from 2012 through 2017, the U.S. Attorney's office said.
This is not Smith's first legal trouble related to the Portland Marathon. In an investigation that spanned from 2017 to 2018, the Oregon Department of Justice found that Smith illegally loaned himself and his companies money from the marathon coffers, overpaid executives and contracted his own for-profit company to oversee the race.
As part of the 2018 settlement, the Oregon DOJ ordered Smith to pay $865,000 to the Portland Marathon; he was also barred from working at any charitable organization, other foot races, or as a lawyer in Oregon. He was also ordered to dissolve his for-profit company, Next Events.
Smith previously worked as a lawyer in Portland and was a founding partner of the downtown Portland law firm Bullard Law. A spokesperson told KGW in 2018 Smith is no longer affiliated with the firm.
The city of Portland encountered a number of issues with the race under Smith's leadership, though none are believed to have involved anything criminal. In 2016, the marathon sent runners an extra half-mile and awarded the winner’s trophy to the wrong person. In 2017, the city initially denied an event permit for the Portland Marathon, citing lack of police officers available for the event’s original route, and insufficient communications from marathon organizers.