2006-06-19 10:21:43globalist
中國全球緝捕貪污銀行人員(IHT)
４０００名銀行官員外逃，國營銀行５百億美元不見了～～～～
Global hunt highlights scale of graft in China
By David Lague International Herald Tribune
SUNDAY, JUNE 18, 2006
They may have been small- time bankers from a provincial Chinese city, but they traveled like high rollers.
On Oct. 2, 2001, three junior Bank of China managers from the southern Chinese province of Guangdong boarded a private jet in Vancouver for a flight to Las Vegas. One of the bankers, Xu Chaofan, was in a generous mood. He tipped the flight operator more than $1,200, according to evidence that Bank of China later presented in a Hong Kong court. The bank testified that Xu then lost $2,368,400 on the tables at the Caesar’s Palace and Paris casinos.
For a man on a modest salary, this should have been a heavy financial blow. At the time, Xu and his colleagues, Yu Zhendong and Xu Guojun, were earning about $925 a month.
However, court records in Hong Kong and the United States suggest that this was but a minor setback for the three bankers. They are accused of conspiring to embezzle at least $485 million from Bank of China’s branch at Kaiping, a small city in the booming Pearl River Delta, before fleeing overseas. Yu has been convicted in the United States and repatriated to China, where he is serving a 12-year prison sentence.
The sheer scale of the Kaiping scandal highlights China’s challenge in cleaning up a banking system riddled with corruption and mismanagement.
”The internal controls in China’s banking system are really, really poor,” said Liao Ran, the program coordinator for South Asia and greater China at Transparency International, an independent anti-corruption organization based in Berlin. ”Kaiping is not the only case. There have been many others.”
Corruption scandals have rocked state-owned banks, including Bank of China, in recent years, with dozens of officials jailed or dismissed as a result.
For the banks, the stakes are high. Failure to stamp out corruption could leave them vulnerable to competition from well-run foreign banks gearing up to enter the Chinese market. Under the terms of China’s entry into the World Trade Organization, foreign banks will be allowed to operate freely in China as of the end of this year. If losses from corruption continue to erode profit and damage public confidence in domestic banks, China’s army of thrifty savers could be tempted to switch their business to the newcomers.
”Corporate governance issues are one of the biggest challenges the Chinese face,” said Charlene Chu, a banking analyst for the financial ratings agency Fitch Ratings who is based in Beijing. ”Banks have recognized that getting control over the branches is really the key.”
Apart from the size of the theft, the Kaiping case stands out from many other graft investigations in China because the authorities have had to take legal action offshore, mainly in Hong Kong and the United States, as they scrambled to recover the stolen funds.
China has also needed the cooperation of law enforcement agencies in Hong Kong, Canada and the United States to track down the fugitives from what has been described as the country’s biggest bank theft since the Communists came to power in 1949.
This has opened a rare window on official corruption at a time when most graft investigations remain confidential until suspects are detained or a court verdict issued. Even then, usually only limited information is made public.
”I think domestically, these things have been kept fairly quiet,” said Li Hui, head of China research for the Hong Kong-based brokerage firm CLSA Asia- Pacific Markets. ”There is always an information gap in China.”
The international pursuit of the Kaiping managers has also drawn fresh attention to an exodus from China of corrupt government officials and their families. As many as 4,000 officials have pocketed more than $50 billion and fled the country in recent years, according to reports in the official media.
A report released last year by the Organization for Economic Cooperation and Development, which is based in Paris, said that an estimated $24 billion of illegally gained assets was laundered every year in China and that ”the amounts brought secretly out of the country have kept rising each year.”
Details of the elaborate Kaiping embezzlement have emerged in a series of civil and criminal cases that show how some of the missing funds were transferred from the Bank of China branch at Kaiping to Hong Kong and invested in property or laundered through casinos in Macao and Las Vegas. It was only a matter of days after the three managers returned to China from Las Vegas that the authorities became suspicious about irregularities in the accounts at Kaiping.
Alerted as the bank started an investigation, the three fled in what appeared to be an operation organized well in advance. Court records in Hong Kong show that they arrived from the mainland together on Oct. 13, 2001, and took the same flight to Vancouver on Oct. 15. Ahead of their escape, the men’s families had already used false travel documents to enter Hong Kong and then travel to North America, according to Hong Kong police officers.
Although the Chinese authorities waited six months to announce that the theft had been discovered, Bank of China customers in the Kaiping area knew almost immediately that some- thing was amiss.
On Oct. 17, 2001, depositors started lining up at 20 Bank of China branches in the Kaiping area. The authorities, who have long feared that a run on China’s fragile state-owned banks could spark widespread political unrest or a financial crisis, responded by trucking in cash from the provincial capital, Guangzhou. In cooperation with law enforcement agencies in Hong Kong, Canada and the United States, the Chinese authorities also started an international hunt for the fugitive bankers.
As part of its campaign to recover the stolen funds, Bank of China initiated a civil action in the Hong Kong High Court against two of Xu Chaofan’s relatives and a third defendant. After hearing extensive evidence from Bank of China, the court last year ordered that Xu’s sister, Xu Xiali; his brother-in-law, Kwong Wa-po; and the third defendant, Ching Fo-chu, should return the money they had received directly or indirectly from the three Kaiping managers. In an earlier criminal case, Xu Xiali and Ching were jailed in Hong Kong for two years and nine months on charges of laundering proceeds from Kaiping.
Kwong, who is wanted by the authorities in Hong Kong and the United States, failed to appear for the civil case. According to the court judgment, Kwong left Hong Kong for the United States the day after the Kaiping managers fled to Vancouver. A central witness in the Hong Kong case was Liao Hai, Bank of China’s provincial deputy director in Guangdong, who was closely involved in investigating the theft.
Based on Liao’s evidence, which was not challenged at the trial, the judgment described how some of the stolen funds were transferred to Hong Kong. It said the three Kaiping managers had authorized bogus loans from the Kaiping branch to several local companies.
These funds were first deposited in accounts these companies held at Bank of China in Kaiping. The money was then withdrawn, with instructions for the bank to transfer it to the account of Ever Joint Properties, a company based in Hong Kong and controlled by the three managers.
Liao told the court that the investigation of records at Kaiping showed that the three managers channeled $212 million from the bank to Ever Joint between 1992 and 2001 in 244 transfers. In 1998 alone, $95 million from Bank of China Kaiping was credited to Ever Joint.
For Yu, freedom was short-lived. He was arrested in Los Angeles 14 months after leaving China. In April 2004 he pleaded guilty to racketeering charges arising from the Kaiping theft and was sentenced in the U.S. District Court in Las Vegas to 12 years in prison.
As part of a plea agreement, Yu, 43, was returned to face the courts in his homeland on the condition that he would not be sentenced to a term longer than 12 years, tortured or executed.
Evidence in the case against Yu included a series of multimillion-dollar transfers he and his fellow conspirators arranged from Hong Kong to the accounts of Las Vegas casinos, according to a U.S. Department of Justice statement. Yu’s wife, Yu Xuhai, was also arrested and later pleaded guilty to unlawfully obtaining U.S. citizenship. Her sentencing has been postponed while she cooperates with investigators. The other two bankers and their wives were arrested in October 2004.
A federal grand jury in Las Vegas in January indicted Xu Guojun, 47, and his wife, Yu Yingyi, 43, along with Xu Chao- fan, 40, and his wife Kuang Wanfang, 39, on charges of racketeering, money laundering and fraud. They have pleaded not guilty and are scheduled to go on trial in September. Kwong Wa-po, 42, who was indicted on the same charges, remains a fugitive.
It is unclear from court documents how much of the money from Kaiping has been recovered. Bank of China said it had written off the full amount.
The Chinese authorities and anti- corruption specialists have welcomed the repatriation of Yu and the indictments of the other bankers as a breakthrough. ”This might serve as a deterrent to corrupt officials if they plan to run away,” Liao of Transparency International said.
At the same time, the authorities are continuing with a campaign to plug ac- counting loopholes and improve monitoring throughout the banking system.
For most analysts, though, the sheer size of the branch network means further scandals like Kaiping cannot be ruled out.
”There has been overall improvement, but to really revamp the system will take years,” Li of CLSA said.
Global hunt highlights scale of graft in China
By David Lague International Herald Tribune
SUNDAY, JUNE 18, 2006
They may have been small- time bankers from a provincial Chinese city, but they traveled like high rollers.
On Oct. 2, 2001, three junior Bank of China managers from the southern Chinese province of Guangdong boarded a private jet in Vancouver for a flight to Las Vegas. One of the bankers, Xu Chaofan, was in a generous mood. He tipped the flight operator more than $1,200, according to evidence that Bank of China later presented in a Hong Kong court. The bank testified that Xu then lost $2,368,400 on the tables at the Caesar’s Palace and Paris casinos.
For a man on a modest salary, this should have been a heavy financial blow. At the time, Xu and his colleagues, Yu Zhendong and Xu Guojun, were earning about $925 a month.
However, court records in Hong Kong and the United States suggest that this was but a minor setback for the three bankers. They are accused of conspiring to embezzle at least $485 million from Bank of China’s branch at Kaiping, a small city in the booming Pearl River Delta, before fleeing overseas. Yu has been convicted in the United States and repatriated to China, where he is serving a 12-year prison sentence.
The sheer scale of the Kaiping scandal highlights China’s challenge in cleaning up a banking system riddled with corruption and mismanagement.
”The internal controls in China’s banking system are really, really poor,” said Liao Ran, the program coordinator for South Asia and greater China at Transparency International, an independent anti-corruption organization based in Berlin. ”Kaiping is not the only case. There have been many others.”
Corruption scandals have rocked state-owned banks, including Bank of China, in recent years, with dozens of officials jailed or dismissed as a result.
For the banks, the stakes are high. Failure to stamp out corruption could leave them vulnerable to competition from well-run foreign banks gearing up to enter the Chinese market. Under the terms of China’s entry into the World Trade Organization, foreign banks will be allowed to operate freely in China as of the end of this year. If losses from corruption continue to erode profit and damage public confidence in domestic banks, China’s army of thrifty savers could be tempted to switch their business to the newcomers.
”Corporate governance issues are one of the biggest challenges the Chinese face,” said Charlene Chu, a banking analyst for the financial ratings agency Fitch Ratings who is based in Beijing. ”Banks have recognized that getting control over the branches is really the key.”
Apart from the size of the theft, the Kaiping case stands out from many other graft investigations in China because the authorities have had to take legal action offshore, mainly in Hong Kong and the United States, as they scrambled to recover the stolen funds.
China has also needed the cooperation of law enforcement agencies in Hong Kong, Canada and the United States to track down the fugitives from what has been described as the country’s biggest bank theft since the Communists came to power in 1949.
This has opened a rare window on official corruption at a time when most graft investigations remain confidential until suspects are detained or a court verdict issued. Even then, usually only limited information is made public.
”I think domestically, these things have been kept fairly quiet,” said Li Hui, head of China research for the Hong Kong-based brokerage firm CLSA Asia- Pacific Markets. ”There is always an information gap in China.”
The international pursuit of the Kaiping managers has also drawn fresh attention to an exodus from China of corrupt government officials and their families. As many as 4,000 officials have pocketed more than $50 billion and fled the country in recent years, according to reports in the official media.
A report released last year by the Organization for Economic Cooperation and Development, which is based in Paris, said that an estimated $24 billion of illegally gained assets was laundered every year in China and that ”the amounts brought secretly out of the country have kept rising each year.”
Details of the elaborate Kaiping embezzlement have emerged in a series of civil and criminal cases that show how some of the missing funds were transferred from the Bank of China branch at Kaiping to Hong Kong and invested in property or laundered through casinos in Macao and Las Vegas. It was only a matter of days after the three managers returned to China from Las Vegas that the authorities became suspicious about irregularities in the accounts at Kaiping.
Alerted as the bank started an investigation, the three fled in what appeared to be an operation organized well in advance. Court records in Hong Kong show that they arrived from the mainland together on Oct. 13, 2001, and took the same flight to Vancouver on Oct. 15. Ahead of their escape, the men’s families had already used false travel documents to enter Hong Kong and then travel to North America, according to Hong Kong police officers.
Although the Chinese authorities waited six months to announce that the theft had been discovered, Bank of China customers in the Kaiping area knew almost immediately that some- thing was amiss.
On Oct. 17, 2001, depositors started lining up at 20 Bank of China branches in the Kaiping area. The authorities, who have long feared that a run on China’s fragile state-owned banks could spark widespread political unrest or a financial crisis, responded by trucking in cash from the provincial capital, Guangzhou. In cooperation with law enforcement agencies in Hong Kong, Canada and the United States, the Chinese authorities also started an international hunt for the fugitive bankers.
As part of its campaign to recover the stolen funds, Bank of China initiated a civil action in the Hong Kong High Court against two of Xu Chaofan’s relatives and a third defendant. After hearing extensive evidence from Bank of China, the court last year ordered that Xu’s sister, Xu Xiali; his brother-in-law, Kwong Wa-po; and the third defendant, Ching Fo-chu, should return the money they had received directly or indirectly from the three Kaiping managers. In an earlier criminal case, Xu Xiali and Ching were jailed in Hong Kong for two years and nine months on charges of laundering proceeds from Kaiping.
Kwong, who is wanted by the authorities in Hong Kong and the United States, failed to appear for the civil case. According to the court judgment, Kwong left Hong Kong for the United States the day after the Kaiping managers fled to Vancouver. A central witness in the Hong Kong case was Liao Hai, Bank of China’s provincial deputy director in Guangdong, who was closely involved in investigating the theft.
Based on Liao’s evidence, which was not challenged at the trial, the judgment described how some of the stolen funds were transferred to Hong Kong. It said the three Kaiping managers had authorized bogus loans from the Kaiping branch to several local companies.
These funds were first deposited in accounts these companies held at Bank of China in Kaiping. The money was then withdrawn, with instructions for the bank to transfer it to the account of Ever Joint Properties, a company based in Hong Kong and controlled by the three managers.
Liao told the court that the investigation of records at Kaiping showed that the three managers channeled $212 million from the bank to Ever Joint between 1992 and 2001 in 244 transfers. In 1998 alone, $95 million from Bank of China Kaiping was credited to Ever Joint.
For Yu, freedom was short-lived. He was arrested in Los Angeles 14 months after leaving China. In April 2004 he pleaded guilty to racketeering charges arising from the Kaiping theft and was sentenced in the U.S. District Court in Las Vegas to 12 years in prison.
As part of a plea agreement, Yu, 43, was returned to face the courts in his homeland on the condition that he would not be sentenced to a term longer than 12 years, tortured or executed.
Evidence in the case against Yu included a series of multimillion-dollar transfers he and his fellow conspirators arranged from Hong Kong to the accounts of Las Vegas casinos, according to a U.S. Department of Justice statement. Yu’s wife, Yu Xuhai, was also arrested and later pleaded guilty to unlawfully obtaining U.S. citizenship. Her sentencing has been postponed while she cooperates with investigators. The other two bankers and their wives were arrested in October 2004.
A federal grand jury in Las Vegas in January indicted Xu Guojun, 47, and his wife, Yu Yingyi, 43, along with Xu Chao- fan, 40, and his wife Kuang Wanfang, 39, on charges of racketeering, money laundering and fraud. They have pleaded not guilty and are scheduled to go on trial in September. Kwong Wa-po, 42, who was indicted on the same charges, remains a fugitive.
It is unclear from court documents how much of the money from Kaiping has been recovered. Bank of China said it had written off the full amount.
The Chinese authorities and anti- corruption specialists have welcomed the repatriation of Yu and the indictments of the other bankers as a breakthrough. ”This might serve as a deterrent to corrupt officials if they plan to run away,” Liao of Transparency International said.
At the same time, the authorities are continuing with a campaign to plug ac- counting loopholes and improve monitoring throughout the banking system.
For most analysts, though, the sheer size of the branch network means further scandals like Kaiping cannot be ruled out.
”There has been overall improvement, but to really revamp the system will take years,” Li of CLSA said.