Bankers indicted in US$485m fraud scheme
(China Daily)
Updated: 2006-02-02 07:15

WASHINGTON: A US grand jury indicted two former Bank of China (BOC) managers and their wives on Tuesday concerning a complex scheme that authorities say defrauded the bank of US$485 million, the Justice Department said.

The two couples and the fugitive brother of one of the wives were charged with 15 counts of racketeering, money laundering and fraud, the department said in a statement announcing the indictment by a federal grand jury in Las Vegas.

Xu Guojun and Xu Chaofan were managers of BOC's Kaiping Branch in Guangdong Province in the 1990s. The bank is one of the country's four biggest lenders.

They laundered the stolen money through Hong Kong, Canada, the United States and other countries and regions in a scheme that began in 1991 and ran until 2004, when the couples were arrested, the statement said.

The two men created shell corporations in Hong Kong and funnelled the BOC's money into the fake firms and into numerous personal bank and investment accounts. The two bankers then emigrated 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 US citizens, it said.

Kuang and Yu were accused of helping their husbands launder the proceeds, including through Las Vegas casino accounts. They also violated immigration laws by entering the country illegally and then securing US passports through fraudulent means, the Department of Justice said.

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

A third former manager of the BOC Kaiping Branch pleaded guilty to playing a role in the scheme and co-operated with investigators, the statement said. He returned voluntarily to China to face prosecution for bribery and bank theft, it added.

(China Daily 02/02/2006 page1)