[AML-CFT] China bank managers launder money through LV casinos
- Two former managers of the Bank of China and their wives were convicted on Aug. 29, 2008, by a federal jury in Las Vegas 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 today.
Xu Chaofan (a/k/a Hui Yat Fai), Xu Guojun (a/k/a Hui Kit Shun), Kuang Wan Fang (a/k/a Wendy Kuang) and Yu Ying Yi were convicted after being charged in the 15-count superseding indictment on Jan. 31, 2006. Sentencing is scheduled for Nov. 24, 2008.
Evidence presented during the trial established the elaborate scheme to defraud the Bank of China of at least $485 million, orchestrated by former managers Xu Chaofan, Xu Guojun and a third former bank manager, Yu Zhendong (a/k/a Yu Wing Chung) who pleaded guilty in connection with this investigation and cooperated with the United States.
According to information presented in court, 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.
Evidence also proved that 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 this country 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.
Evidence presented at trial established that 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. 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," said Acting Assistant Attorney General Matthew Friedrich. "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."
"These convictions are the culmination of a multi-agency effort to take down a sophisticated criminal enterprise that sought to exploit our immigration system and our financial regulations," said Julie L. Myers, Assistant Secretary of Homeland Security for ICE. "Our goal is to work with our law enforcement partners in the U.S. and around the world to identify and ultimately dismantle these organizations and ensure that the members face justice in the United States."
Defendants Xu Chaofan, Xu Guojun, Kuang Wan Fang and Yu Ying Yi were charged on Sept. 21, 2004, in an 11-count indictment with conspiring to violate, and substantive violations of, U.S. immigration law.
The 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 was convicted for embezzlement for his role in the bank theft. Yu Zhendong's true wife, Yu Xuhui (a/k/a Fion Yu), pleaded guilty on April 26, 2005, to unlawfully procuring U.S. citizenship. She has agreed to voluntarily relinquish her American citizenship, but was permitted to remain in the United States with the couple's children as long as she does not commit another crime.
Yu Zhendong's fake American wife, Shanna Yu Ma (a/k/a Yu Shuzhan) pleaded guilty to submitting a false statement to the Immigration and Naturalization Service, now part of the Department of Homeland Security, in support of Yu Xuhui's application for naturalization. Both Ms. Ma and Ms. Yu were sentenced in December 2007 to terms of probation.
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.
International organized crime is defined as those self-perpetuating associations of individuals who operate internationally for the purpose of obtaining power, influence, monetary and commercial gains, wholly or in part by illegal means, while protecting their activities through a pattern of corruption and violence. International organized criminals operate in hierarchies, clans, networks and cells. The crimes they commit vary as widely as the organizational structures they employ.
This matter 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. Significant assistance was also provided by Kyle Latimer of the Criminal Division's Office of International Affairs. The U.S. Attorney's Office for the District of Nevada provided significant support for the prosecution and coordination of witnesses from throughout the United States and overseas.
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.
The government of the People's Republic of China, in particular the Ministries of Justice and Public Security along with the Hong Kong Department of Justice and Hong Kong Police Force, also provided substantial assistance in producing evidence and making witnesses available, both for testimony at trial and videotaped depositions.
Posted By Inonu Akgun ALP to AML-CFT at 9/03/2008 01:28:00 PM