In a major Las Vegas criminal case this week two former managers of the Bank of China and their wives were convicted by a federal jury on charges of racketeering, money laundering, international transportation of stolen property as well as passport and visa fraud, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney Gregory A. Brower of the District of Nevada announced.
Xu Chaofan, Xu Guojun, Kuang Wan Fang and Yu Ying Yi were convicted after being charged in the 15-count indictment, with sentencing scheduled for November 24, 2008.
Evidence presented during the trial established an elaborate scheme to defraud the Bank of China of at least $485 million, orchestrated by the accuseds and a third former bank manager, Yu Zhendong who pleaded guilty and cooperated with the authorities, Huliq.com reports.
The scheme involved efforts by the bank managers to launder the stolen money through Hong Kong, Canada and the United States, among other countries, and then immigrate to the United States from China with their wives by obtaining false identities and entering into sham marriages with naturalized U.S. citizens.
The bank managers' true wives, Kuang Wan Fang and Yu Ying Yi, assisted their husbands in laundering the proceeds of the fraudulent scheme and violated U.S. immigration laws by entering the United States illegally and then securing U.S. citizenship and passports through fraudulent means. The indictment also charged Kwong Wa Po, who remains a fugitive.
All five defendants were charged with engaging in a RICO conspiracy that began in 1991 and continued until October 2004, when the former bank managers and their wives were arrested.
The underlying racketeering activities included engaging in monetary transactions with stolen money, transportation of stolen money, passport fraud and visa fraud. The former bank managers created a number of shell corporations in Hong Kong and, with the assistance of others, funneled the bank's money into these companies as well as numerous personal bank and investment accounts.
Assisted by their wives, relatives and others, the former bank managers then laundered the stolen proceeds through Canada and the United States. Evidence presented at trial included a significant number of transactions with the stolen money through Las Vegas casinos, including bets at the casinos that ranged from $20 000 up to $80 000.
All five defendants also were convicted of engaging in a money laundering conspiracy and conspiracy to transport stolen money that began in 1998 and continued through October 2004. These conspiracy charges focused on the laundering of the stolen money in the United States not only through casinos, but also through numerous bank accounts established in the United States by the defendants.
The two former bank managers were also convicted on three counts each of visa fraud – specifically, the possession and use of a fraudulently procured non-immigrant U.S. visa to enter and/or remain in Las Vegas. The two bank managers' true wives were convicted of three counts each of passport fraud – specifically, the use of a U.S. passport secured through a false statement to enter or facilitate their stay in Las Vegas.
" Having embezzled nearly $500 million from a Chinese bank, these defendants turned to the United States as a place to hide themselves and their ill-gotten gains," said Friedrich.
"This three month trial showed, through the testimony of 34 witnesses and approximately 500 exhibits, the lengths to which the defendants went to conceal their activities, including their use of false identities, sham marriages for immigration purposes, phony documents and nominee companies. Overseas offenders who turn to the United States as a safe haven, and who try to exploit our financial systems, can similarly expect to be prosecuted."
"The subjects convicted in this case attempted to elude law enforcement and use the United States as a haven for masking their criminal activities and illegal proceeds," said Kenneth W. Kaiser, Assistant Director of the FBI's Criminal Investigative Division. "This elaborate scheme was investigated and disrupted thanks to the cooperation from our domestic and international law enforcement partners. We will continue to work together sharing intelligence information and conducting joint operations as prescribed in the Law Enforcement Strategy to Combat International Organized Crime of April 2008."
On April 23, 2008, Attorney General Michael B. Mukasey announced the Law Enforcement Strategy to Combat International Organized Crime to address the growing threat to U.S. security and stability posed by international organized crime. The strategy was developed following an October 2007 International Organized Crime Threat Assessment.
The strategy specifically reacts to the globalization of legal and illegal business, advances in technology, particularly the Internet, and the evolution of symbiotic relationships between criminals, public officials and business leaders that have combined to create a new, less restrictive environment within which international organized criminals can operate.
U.S. law enforcement must combat international organized criminals who are adept at using the globally connected financial system to launder their illegal proceeds in locations far from where the ill-gotten gains were initially generated. Ultimately, the strategy aims to create consensus among domestic law enforcement in identifying the most significant priority targets and then taking unified and concerted action among domestic and international law enforcement in significantly disrupting and dismantling those targets.
The case was prosecuted by Trial Attorneys Cynthia Stone and Krista Tongring of the Criminal Division's Organized Crime and Racketeering Section and Assistant U.S. Attorney Ronald Cheng of the U.S. Attorney's Office for the Central District of California. Organized Crime Strike Force Chief Eric Johnson of the U.S. Attorney's Office for the District of Nevada served as local counsel.
The case was investigated by the FBI's Las Vegas Field Office and U.S. Immigration and Customs Enforcement of the Department of Homeland Security. Essential support was also provided by the FBI's offices in Beijing and Hong Kong.