Former Bank of China managers, wives, sentenced for stealing millions

By Mary Manning

Wednesday, May 6, 2009 | 4:56 p.m.

Two former managers of the Bank of China and their wives were sentenced today after they were convicted on Aug. 29 by a federal jury in Las Vegas, on charges of racketeering, money laundering, international transportation of stolen property and fraud.

Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Gregory A. Brower of Nevada said that the bank manages and their wives stole more than $485 million and laundered it through Las Vegas casinos.

U.S. District Judge Philip M. Pro sentenced Xu Chaofan, also known as Hui Yat Fai, to 25 years in prison; Xu Guojun, also known as Hui Kit Shun, to 22 years in prison; Kuang Wan Fang, also known as Wendy Kuang, to eight years in prison; and Yu Ying Yi to eight years in prison.

All four were sentenced to three years of supervised release and ordered to pay $482 million in restitution.

Denaturalization proceedings against Kuang Wan Fang and Yu Ying Yi have been initiated by the government.

Evidence presented at trial established an 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, also known as 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 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 getting 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, helped their husbands launder the proceeds of the fraud and violated U.S. Immigration laws by entering the country illegally and then securing U.S. Citizenship and passports through fraud.

All five people were charged with engaging in a RICO conspiracy that began in 1991 and continued until October 2004 when the former bank manages and their wives were arrested.

The underlying racketeering activities included money transactions with stolen money, transporting stolen money, passport fraud and visa fraud. Evidence at the trial established that the former bank managers created a number of shell corporations in Hong Kong and, with 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 during the trial included a significant number of transactions with the stolen money through Las Vegas casinos, including bets at casinos that ranged from $20,000 up to $80,000.

All five people also were convicted of engaging in a money laundering conspiracy as well as a conspiracy to transport stolen money that began in 1998 and continued through October 2004. These conspiracy charges include laundering money not only through casinos, but through numerous bank accounts established in the United States.

The two former bank managers were also convicted on three counts each of visa fraud, possessing and using a fake procured non-immigrant U.S. Visa to enter or remain in the United States. The two wives were convicted of three counts each of passport fraud.

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. Zhendong's wife, Yu Xuhui, also known as Fion Yu, pleaded guilty on April 26, 2005, to unlawfully procuring U.S. Citizenship. She 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.

Zhendong's fake American wife, Shanna Yu Ma, also known as 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 Xuhui's application for naturalization. Both May and Yu were sentenced in December 2007 to probation terms.