Bank of China Accuses Beijing Real Estate Firm of $78 Million Mortgage Loan Fraud

Strategic Insights -

A recent scandal involving the Beijing-based real estate firm, Beijing Huayuanda Real Estate Development Company, has come to light as the Bank of China (BOC) has accused the company of fraudulently obtaining approximately 645 million yuan (US$78 million) in mortgage loans. The loans were allegedly obtained using falsified housing purchase contracts, and the funds were then diverted to unknown locations outside Beijing. The project, known as the "Senhao apartment project," was suspended in 2002 due to the risks involved.

Key Takeaways:

  • The Bank of China has accused Beijing Huayuanda Real Estate Development Company of fraudulently obtaining around 645 million yuan (US$78 million) in mortgage loans between December 2000 and June 2002.
  • The loans were allegedly obtained using falsified housing purchase contracts, and the funds were then diverted to unknown locations outside Beijing.
  • The project, known as the "Senhao apartment project," was suspended in 2002 due to the risks involved.
  • The Bank of China has sacked Xu Weilian, deputy chief of the Beijing branch's retailing sector, due to his alleged role in offering the loans.
  • Other employees accused of being involved in the scam have been demoted.
  • The procuratorate in Beijing has placed the case on file for investigation and prosecution, and several individuals, including Zou Qing, chairman of the Huayuanda company, Xu, and two lawyers, Kong Weidong and Zhan Jun, have been arrested.
  • Kong allegedly provided fake documents for 600 million yuan (US$73 million), and Zhan was involved in fake documents worth more than 30 million yuan (US$3.6 million).
  • The National Audit Office uncovered the case in 2004 during an audit.

Statistics:

  • 645 million yuan (US$78 million): The amount of money allegedly fraudulently obtained by Beijing Huayuanda Real Estate Development Company.
  • 2000-2002: The period during which the loans were allegedly obtained using falsified housing purchase contracts.
  • 300: The number of purchase contracts reportedly falsified by the Huayuanda company.
  • 300: The number of fake ID cards allegedly used by the Huayuanda company.
  • 600 million yuan (US$73 million): The amount of fake documents provided by Kong Weidong.
  • 30 million yuan (US$3.6 million): The amount of fake documents worth more than that allegedly involved in Zhan Jun.
  • 2: The number of lawyers accused of providing fake documents, Kong Weidong and Zhan Jun.
  • 1: The number of individuals arrested, Zou Qing, chairman of the Huayuanda company.
  • 4: The number of individuals accused of being involved in the scam, including Xu Weilian, Kong Weidong, Zhan Jun, and another employee.

Sources:

  • Xinhua
  • Nanfang Weekend
  • XIC (China Industry and Commerce)