Three Chinese were indicted on Friday in Federal District Court in Manhattan on charges that they defrauded the New York branch of the Bank of China out of more than US$25 million. This scam is linked to the downfall of the former chairman of the bank, Chinese media said.
The indictment last week in New York of Zhou Qiang, Liu Ping and Yang Zhongqi was linked to the fate of former BOC chairman Wang Xuebing, who used to serve a governor of the New York branch.
Wang, 52, was sentenced to 12 years in prison by a Beijing court last December after being convicted of embezzlement and accepting bribes. He was once seen as a leading mover in the reform of China's state-owned banking industry.
According to the New York Times, Zhou, Liu and Yang were indicted on Friday at the Federal District Court in Manhattan on charges they defrauded the New York branch of the BOC out of more than US$25 million from 1991 to 2002.
The paper identified the three by their English names John Chou, 43, and his wife, Sherry Liu, 44, of Alpine, New Jersey, and former BOC bank manager, Patrick Young, 46, of Massapequa, New York.
According to a China Central Television report, Zhou and Liu falsified international trading documents in an effort to secure loans aimed at financing trade transactions that never took place. The couple bribed Yang, the BOC employee, to participate in the scam., and and used their proceeds to extend loans to their businesses and to enrich themselves and their family.
Former BOC chairman Wang was sacked in January 2002 in connection with credit problems at bank branches under his control when he headed the BOC.
During the period of the alleged crimes, Wang served as both general manager of the BOC in New York and later as the president of the bank.
Almost immediately following his sacking, the BOC was jointly fined US$20 million by China's central bank, the People's Bank of China, and by the US Treasury Department for irregularities at the BOC branch in New York.
The BOC, China's main commercial foreign exchange bank and one of the big four state-owned commercial banks, is in the process of transforming itself into a joint-stock company with a public listing set for some time in 2005.
The indictment charges that from 1991 to 2002, Mr. Chou, Ms. Liu and Mr. Young schemed to get the Bank of China to pay the beneficiaries of letters of credit, which were companies that the couple owned, and to extend other financing for international trade transactions that never took place, according to a spokesman for the United States attorney for the Southern District of New York.
(Xinhua News Agency February 16, 2004)
