Largest Embezzlement in China's History Unfolds as Bank of China Managers Charged with Money Laundering

Strategic Insights -

The US government has charged two former Bank of China managers and their wives with laundering over $485 million embezzled from the bank through various channels, including Las Vegas casinos. The 15-count indictment follows the arrest of the two couples by the FBI in 2004 for immigration fraud. The case has produced some of the closest co-operation between the mainland and American governments, with US officials and FBI agents travelling to Guangzhou to take a deposition from a key witness. The indictment alleges that the bank managers created shell companies in Hong Kong to funnel the money out of the mainland, which was then laundered through Canada and the US.

Key Takeaways:

  • Two former Bank of China managers, Xu Chaofan and Xu Guojun, and their wives, Kuang Wanfang and Yu Yingyi, have been charged with money laundering and racketeering in the US.
  • The indictment alleges that the pair embezzled at least $485 million from Bank of China's Kaiping sub-branch in Guangdong between 1991 and 2004.
  • The money was laundered through various channels, including Las Vegas casinos, casinos in Hong Kong, Canada, and the US.
  • A "significant amount" of the stolen money was laundered through casinos in Las Vegas.
  • The indictment also mentions a deposit of $2 million into a Las Vegas hotel and casino account.
  • A third Kaiping bank manager, Yu Zhendong, pleaded guilty to racketeering in 2004 and was returned to China last year to face similar charges.
  • His wife, who was also charged, is being allowed to stay in the US as part of the plea bargain.
  • Xu Chaofan faced a longer term because he was believed to be the mastermind of the scheme.

Sources:

  • [Statement from US Assistant Attorney-General Alice Fisher]
  • [South China Morning Post, "Plea-bargain deal offered to Bank of China executives in embezzlement case"]
  • [US Department of Justice statement]

Statistics:

  • Over $485 million embezzled from Bank of China's Kaiping sub-branch in Guangdong between 1991 and 2004.
  • $2 million deposited into a Las Vegas hotel and casino account.
  • 15-count indictment including racketeering, money laundering, and immigration fraud charges.
  • 12 years the maximum sentence Yu Zhendong could face in China under an agreement between the US and Chinese governments.
  • 25 years the proposed jail term offered to Xu Chaofan as part of a plea-bargain deal.
  • 20 years the proposed jail term offered to Xu Guojun as part of a plea-bargain deal.