Wednesday, February 01, 2006

Very quickly, a half billion dollar scandal just broke out Bank of China, which is planning to list in Hong Kong in the next few months. Granted, half a billion is not a small sum, and I applaud these bankers for going for such a large amount. Basically, if you are going to run away, you'd better make sure you have a few tens of millions. The life of a fugitive can be expensive.

Will this affect the IPO? It depends on when it happened and who else is implicated. If it happened a few years ago, and it was only these guys, it should not be such a big deal. Most likely, the money has been written off by the bank. It's still not great news though.....we'll keep track of it.

New charges in $485M theft from Bank of China
Former bank managers alleged to have funneled money internationally through front companies.
January 31, 2006: 7:28 PM EST

WASHINGTON (CNN) - Two former Chinese bankers and their wives were indicted in Las Vegas in connection with a massive scheme to steal and launder nearly half a billion dollars from the Bank of China, Justice Department officials announced Tuesday.

The former managers of the state-owned Bank of China are alleged to have been engaged in an elaborate plot in which they stole $485 million by running funds through front companies and financial institutions in Hong Kong, Vancouver and Las Vegas, officials said. They allegedly planned to immigrate to the United States with their wives and gain citizenship through schemes involving phony documents and sham marriages.

A federal grand jury in Las Vegas brought the new charges against the defendants, who were first jailed in September 2004 on charges of violating immigration laws for trying to illegally gain U.S. citizenship.

A third Chinese banker involved in the alleged conspiracy has pleaded guilty in Las Vegas and returned to China, where he is being prosecuted for embezzlement and bribery.

In Washington, Assistant Attorney General Alice Fisher issued a statement commending prosecutors for untangling what she called a "complex scheme of racketeering, money laundering and fraud".

"We will continue to work closely with our international partners to make sure that the United States is never seen as a haven for criminals to launder the proceeds of their illegal conduct," Fisher said.

Documents identified those indicted as former bankers Xu Chaofan and Xu Guojun and their wives, Kuang Wan Fang and Yu Ying Yi, who prosecutors claim actively assisted their husbands in the scheme.

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