Investment company director Yang Shiming, was sentenced to nine years in jail and a fine of 5.1 million yuan (US$728,571) for money laundering yesterday.
This is the first such case in the province's capital city of Chengdu which leads the country in terms of illicit money deals, a Sichuan website reported.
As well as Yang, the Sichuan Province court dealt with another 15 defendants sentencing them to a range of penalties from death with two years' probation to four years' imprisonment for their involvement in eight fraud cases worth 240 million yuan.
Over a year, the defendants persuaded local companies to deposit money with a designated bank by offering extremely high interest rates and then withdrew the money from the bank with fake company stamps.
They offered large amounts of money to the companies' finance officers to help them produce fake company stamps.
Only 100 million yuan has been recovered, the report said.
The defendants included Yang Jiangfeng, the president of Luchuan Investment and Management Company (Chengdu), and other senior officials of the company.
In October 2005 they persuaded a local company to deposit 27 million yuan in a bank in Chengdu. Later the suspects offered 200,000 yuan to Huang Jian, the company's finance manager. Huang helped them forge a company stamp which they used to withdraw the money.
The defendants continued working like this and in June 2006 Yang Shimin joined them, setting up an investment company which laundered the illicit money.
The defendants transferred 65 million yuan into Yang's company and retrieved it in cash. Yang was offered 8 million yuan and an Audi sedan worth 800,000 yuan as a reward, the website said.
The leading player, Yang Jiangfeng, was sentenced to death with two years' probation, for receipt fraud and finance certificate fraud. Yang's finance manager Yu Hai was given the same punishment for receipt fraud and general manager Lu Jiaqiang was given a life sentence. Others were sentenced to prison terms from four years to 20 years.
"The frauds were not brilliant. The losses could have been avoided if the victim companies or the bank had implemented the finance regulations strictly," prosecutors said.
Officials of victim companies usually pursued high interest rates or even personal profit. On the other hand, the competition between banks had led staff to concentrate on savings alone, leaving loopholes in the procedures, they said.
(Shanghai Daily August 27, 2008)