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China bankers deny US scam charge [Copy link] 中文

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Post time 2006-2-11 23:38:37 |Display all floors
http://news.bbc.co.uk/1/hi/business/4703026.stm

Two former Bank of China managers and their wives have pleaded not guilty to charges in the US of stealing $485m (£272m) and attempted money laundering. Xu Chaofan, Xu Guojun and their wives were charged in Las Vegas with 15 counts, including racketeering and fraud, the US Justice Department said. The two men tried to launder the Bank of China's money through Hong Kong, Canada and the US, the department said. The alleged scam, which ran from the early 1990s, was uncovered in 2004. If convicted of all charges, they each face a maximum of 70 years in jail and a $1.5m fine.

Authorities in the US said the fraud scheme also involved the brother-in-law of one of the bankers, Kuang Wa Po, who is currently described as a fugitive. A sixth man, Yu Zhendong, was detained but later sent back to China to face racketeering charges after agreeing to cooperate with the investigation. Assistant Attorney General Alice Fisher and Nevada US Attorney Daniel Bogden said that the two Bank of China managers set up shell corporations in Hong Kong and moved the bank's money into fake firms and personal accounts.

"The indictment charges the defendants with laundering a significant amount of the stolen money through Las Vegas casino accounts," they said. The two men later attempted to emigrate to the US from China with their wives by obtaining false identities and entering into sham marriages with naturalized US citizens, the Justice Department said. The two couples and their accomplices were detained by US authorities in 2004, the department said. US District Magistrate Judge Lawrence Leavitt said a trial scheduled for later this month would now start on 27 March, citing the case's complexity. State-owned Bank of China is one of China's leading commercial banks.


Is this the biggest case of fraud committed with Chinese money? It certainly is a huge sum. Hopefully the Bank of China's officials will co-operate fully with the US investigation. It will be in their interest to have these people punished fully, even if it is embarrassing. Does anyone have any further news on this?
"People are the water, the ruler is the boat; water can carry the boat, but it can also capsize it."

-- Li Shimin (2nd Tang Emperor, "Taizong")

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Post time 2006-2-12 03:00:40 |Display all floors

A big step forward!

The willingness of the US to cooperate with the Chinese government in bringing these most heinous of criminals to justice is absolutely necessary for China to achieve stability.

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Post time 2006-2-12 07:00:12 |Display all floors
Originally posted by eightyeight at 11-2-2006 19:00
The willingness of the US to cooperate with the Chinese government in bringing these most heinous of criminals to justice is absolutely necessary for China to achieve stability.


And hopefully a sign that the two countries can cooperate rather than just make nasty comments about the other.

But it is important that the case itself is discussed. For example how did they get away with it, what are the necessary steps to be taken to stop it happening again, etc. If anyone has further details please post them here.

[ Last edited by mencius at 2006-2-11 11:01 PM ]
"People are the water, the ruler is the boat; water can carry the boat, but it can also capsize it."

-- Li Shimin (2nd Tang Emperor, "Taizong")

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Post time 2006-2-12 10:08:24 |Display all floors

More Details

UPDATE: Former Bank Of China Managers Face U.S. Charges  
   



02-01-06 06:11 AM EST
HON G KONG (Dow Jones) -- A federal grand jury in Las Vegas has indicted two former Bank of China managers, their wives and a relative in connection with a scheme to defraud the state-owned Chinese bank of $485 million, the Justice Department said Tuesday.

The indictment says Xu Chaofan and Xu Guojun, the former managers, allegedly funneled the money through a shell company in Hong Kong and then on to Canada, the United States and other countries. The funds were eventually passed through Las Vegas Casinos in a scheme that began in 1991 and ran until 2004, when the couples were arrested.

The two couples and a brother of one of the wives were charged with 15 counts of racketeering, money laundering and fraud, the department said in a statement.

Part of the scheme involved immigrating to the United States from China with their wives, Kuang Wanfang and Yu Yingyi, by obtaining false identities and entering into sham marriages with naturalized U.S. citizens, the statement said.

Kuang and Yu allegedly assisted their husbands in laundering the proceeds of the fraudulent scheme and violated U.S. immigration laws by entering the country illegally, then securing U.S. citizenship and passports through fraudulent means.

The indictment alleges that Kuang's brother, who remains a fugitive, helped to launder the money

A third former bank manager, Yu Zhendong, pleaded guilty to engaging in a racketeering enterprise on Feb. 18, 2004 and voluntarily returned to China, where he is being prosecuted for embezzlement and bribery for his role in the bank theft, the statement said.


  (END) Dow Jones Newswires
  02-01-06 0611ET
  Copyright (c) 2006 Dow Jones & Company, Inc.

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