Chinese National Sentenced on Racketeering Charges, Returned to China
Las Vegas, Nev. - A former Bank of China manager, convicted here of federal racketeering charges stemming from the embezzlement of $485 million from the Bank, was returned to China today after being sentenced to 144 months imprisonment and three years supervised release, announced Daniel G. Bogden, United States Attorney for the District of Nevada. ZHEN DONG YU, age 41, a citizen of the People's Republic of China (PRC), was flown from Las Vegas, Nevada, to Beijing, China, pursuant to the terms of a plea agreement. He was escorted by Special Agents of the Federal Bureau of Investigation and U.S. Immigration and Customs Enforcement.
YU was sentenced on April 8, 2004, in U.S. District Court in Las Vegas, for his February 18, 2004 guilty plea to a Criminal Information charging him with Participation in an Enterprise Through a Pattern of Racketeering. The defendant and his alleged co-conspirators, all employees of the Bank of China, embezzled approximately $485 million from the Kaiping Branch of the Bank during the 1990's. The defendant's sentence in the United States terminated on his return to China.
The plea agreement between ZHEN DONG YU and the United States required the United States government to obtain assurances from the PRC regarding his prosecution and incarceration in that country, before the defendant could be sent back to China. The assurances outlined in the plea agreement state that if the defendant is prosecuted in China, he will be sentenced to a term of imprisonment of not more than 12 years, and not tortured or put to death. The Department of State and the Department of Homeland Security worked closely with the Department of Justice to formulate and execute the provisions of the plea agreement that provided for the U.S. to return the defendant to China. Once convicted, the defendant was not eligible for asylum or other status that would have allowed him to legally remain in the U.S., once his prison term was completed.
YU also agreed to the forfeiture of money embezzled from the Bank of China, including approximately $3,750,000 in U.S. currency that has already been seized and returned to the PRC.
YU had been in federal custody since December 19, 2002, when he was arrested in Los Angeles on immigration charges filed against him by the U.S. Attorney's Office in the District of Nevada. Those charges were dismissed as part of his plea agreement.
Two other individuals, GUO JUN XU, aka Kit Shun Hui, and CHAO FAN XU, aka Yat Fai Hui, also alleged to be part of the scheme to defraud the Bank of China, Kaiping Branch, were charged in the District of Nevada in December 2002 with Use of a Fraudulently Obtained Visa. Warrants for their arrest remain outstanding.
According to court records, from about 1992 to October 2001, ZHEN DONG YU, GUO JUN XU, aka Kit Shun Hui, and CHAO FAN XU, aka Yat Fai Hui, were members of an enterprise which developed a scheme to defraud the Bank of China by embezzling money through fraudulent loans and other methods. Because of then-existing banking procedures, ZHEN DONG YU and his associates were able to approve loans and transfers of Bank assets on their signatures alone. During the life of the enterprise, it is estimated that its members embezzled the equivalent of 485 million U.S. dollars.
The scheme was discovered in October 2001, and defendant YU and his associates fled the PRC. The defendant used a false name, a fraudulently-obtained Hong Kong Special Administrative Region (SAR) identification document and a false U.S. visitor's visa to unlawfully enter the United States at Las Vegas, Nevada.
As manager of the Loan Department and later as the manager of the Kaiping Sub-Branch, defendant YU was instrumental in continuing the scheme to defraud over its 10-year life span.
During the course of the embezzlement, the defendant and his co-conspirators transferred large amounts of money to the United States. For example:
• On January 2, 2001, defendant YU transferred approximately $200,000 from one of his bank accounts in Hong Kong to a Citibank account in San Francisco;
• Between October 2, 2001, and October 7, 2001, the co-conspirators transferred approximately $2,000,000 from a bank in Hong Kong to Caesar's Palace in Las Vegas, Nevada;
• On October 15, 2001, the co-conspirators transferred approximately $8,590,000 to the account of Desert Palace, Inc., in Hong Kong;
• Also on October 15, 2001, defendant YU transferred approximately $3,550,000 from bank accounts in Hong Kong to bank accounts in San Francisco.
The ongoing investigation that resulted in this prosecution is being conducted by Special Agents of the Federal Bureau of Investigation and United States Immigration and Customs Enforcement, and law enforcement agents with the PRC, Royal Canadian Mounted Police, and Hong Kong SAR Police Department. This case was prosecuted by Assistant United States Attorney Eric Johnson, and Department of Justice Trial Attorney Marty Woelfle.