Kuang Wan Fang and Yu Ying Yi
Former Bank of China Managers and Their Wives Sentenced for Stealing More Than $485 Million USD and Laundering Money through Las Vegas Casinos
Two former managers of the Bank of China and their wives were sentenced on August 29, 2008, by a Federal jury in Las Vegas on charges of racketeering, money laundering, international transportation of stolen property, as well as passport and visa fraud.
U.S. District Judge Philip M. Pro sentenced Xu Chaofan aka Hui Yat Fai to 300 months in prison, Xu Guojun aka Hui Kit Shun to 264 months in prison, Kuang Wan Fang aka Wendy Kuang to 120 months in prison, and Yu Ying Yi to 120 months in prison. All four defendants were additionally sentenced to three years of supervised release and ordered to pay $485 million USD in restitution. Denaturalization proceedings against Kuang Wan Fang and Yu Ying Yi were completed by the government, taking away their Green Cards.
Evidence presented during the trial established the elaborate scheme to defraud the Bank of China of at least $485 million USD, orchestrated by former managers Xu Chaofan, Xu Guojun and a third former bank manager, Yu Zhendong aka Yu Wing Chung, who pleaded guilty in connection with this investigation and cooperated with the United States.
Assisted by their wives, relatives and others, the former bank managers then laundered the stolen proceeds through Canada and the United States. Evidence presented at trial included a significant number of transactions with the stolen money through Las Vegas casinos, including bets at the casinos that ranged from $20,000 up to $80,000 USD.
The two former bank managers were also convicted on three counts each of visa fraud – specifically, the possession and use of a fraudulently procured non-immigrant U.S. visa to enter and/or remain in the United States. The two bank managers’ true wives were convicted of three counts each of passport fraud – specifically, the use of a U.S. passport secured through a false statement to enter or facilitate their stay in the United States. (1)
Amicus takes their Case
In May 2009, Amicus was contacted by the defendants and asked what could be done for them.
We carefully analyzed their case and identified several serious issues that had to be addressed:
1. China has no Prisoner treaty transfer in effect with the U.S. (2)
2. They are Chinese nationals, which means upon completion of their U.S. Federal sentence they will be deported back to China where they will be executed. (3)
3. The U.S. District Judge Philip M. Pro ordered that they be immediately deported back to China upon completion of their sentence, assuring their executions.
4. The U.S. will not deport them to a “third” country that might offer them sanctuary upon their release.
Amicus Assessed their Situation
The goal was to get them to a country where they would be safe:
1. First we had to find a way and country that would accept them as citizens despite the fact that they have criminal records and are incarcerated in the U.S.
2. Among the many pre-requisites countries are Residency, Criminal History and Medical -- each of these usually requires the applicant to submit various documents stating their eligibility.
3. The country has to have a Prisoner treaty transfer agreement in effect with the U.S. and be willing to accept a person on a treaty transfer.
4. All of the clients are incarcerated and limited in what assistance they could provide us with.
Amicus Provides the Solution
By combining what we do best -- Second Citizenships and Treaty Transfers -- we came up with the best solution to their problem.
We acquired Spanish citizenship for Kuang Wan Fang and Yiu Ying Yi and then arranged for their treaty transfer.
On September 9, 2011, Yu Ying Yi BOP Register Number 19056-031 was successfully treaty transferred to Spain. (4)
On September 23, 2011, Kuang Wan Fang BOP Register Number 15794-064 was successfully treaty transferred to Spain. (4)
Hüseyin Yildirim (born March 10, 1928) is a Turkish-American auto mechanic who was sentenced to life imprisonment in the United States for his courier role in the espionage activities of U.S. serviceman James Hall III during the Cold War era (1981 to 1989).
On July 20, 1989, after a two-day, seven-hour trial, the federal jury found Yildirim guilty of his role as a courier for the convicted spy James Hall III. Hüseyin Yildirim was convicted and sentenced to life imprisonment without the possibility of parole. (1)
Frederick Kramer of Savannah, Georgia, the U.S. assistant attorney who prosecuted Yildirim, sees his old foe as “a manipulative, lying mercenary who creates a simple-minded persona to conceal his absolute cunning”.
B. Avant Edenfield, the federal judge who sentenced the spy to life without possibility of parole, writes that “Yildirim is loathsome, should never be freed and is fortunate not to have forfeited his life for a sordid and treacherous business."
A retired counter-intelligence investigator, who requested anonymity, was no less inflexible: "The Meister (Yildirim's code name) was not small fry. He was one of the most effective, damaging, dangerous spies in the history of the Cold War." (2)
On December 29, 2003, Hüseyin Yildirim BOP Register Number 09542-018 (3) was secretly extradited from the Lompoc Federal Correctional Complex to Turkey within the scope of a bilateral treaty on prisoner exchange between Turkey and the United States. (4)
The curious case of the Canadian with eight citizenships
The reasons to have a second passport are many, but for the world’s wealthy elite, they have often amounted to what Canadian immigration lawyer David Lesperance called “the backup plan.”
He recounted a Shanghainese client who likened second citizenship to having a “fast junk in the harbour, fitted with gold bars.” After generations of turmoil, the bolthole mentality runs deep among China’s rich – by one estimate, 47% of rich mainlanders plan to immigrate within five years.
But it’s not just China’s millionaires. Americans have represented a big slice of business for Lesperance’s Toronto-based practice, as they look for alternatives to a lifetime of tax obligations to the U.S., which are determined by nationality and not residency.
Which brings us to the case of the Canadian with eight citizenships.
Lesperance said his client didn’t start out Canadian; he was a U.S.-born businessman. But at the end of his citizenship spree, he had collected a portfolio of passports via economic citizenship and residency that spanned both sides of the Atlantic, from Belize to Britain. Along the way he became a Canadian, too, and renounced his U.S. citizenship.
“It sounds flaky, but he was intrigued by this concept [of economic citizenship],” said Lesperance, a former Canadian border officer who has worked as an immigration lawyer for more than 25 years. “He had the money. He didn’t need another car, so this is what he spends his money on. It was wonderful to be his lawyer.”
The billionaire bolthole club
The concept of multiple citizenships among the wealthy has been in focus recently thanks to two cases.
Peter Thiel, the Trump--supporting U.S. tech billionaire, was revealed last month to have been granted New Zealand dual citizenship in 2011.
Of more concern to Lesperance’s clients is the case of Xiao Jianhua, the Chinese-Canadian-Antiguan billionaire who on January 27 was whisked away from the luxury Four Seasons apartments in Hong Kong and over the border, in circumstances that raised concerns about Chinese law enforcers acting on special administrative region soil.
He is now reportedly linked to investigations into bribery and market manipulation.
Statements issued on January 30 under Xiao’s name on one of his companies’ WeChat accounts denied that the tycoon had been “abducted” and said he enjoyed consular protection as a Canadian citizen. “I [also] have diplomatic protection as I hold a diplomatic passport. Please don’t worry about me,” one of the since-deleted statements added, without specifying that Xiao held such a document from Antigua and Barbuda.
But Lesperance wasn’t so optimistic about Xiao’s prospects on mainland soil.
“He is screwed. Canadian citizenship is but a tool. ... If you don’t have the assistance of someone to load it or the willingness to fire it, then it just hangs on the wall.”
He noted that Xiao’s family was now reportedly trying to apply pressure for his release via Canada’s Foreign Affairs Department, and former prime minister Brian Mulroney, but “whether this is too little too late, only time will tell.”
Lesperance said he suspected Xiao had not renounced his Chinese citizenship and, for all the efforts taken to acquire an Antiguan diplomatic passport and Canadian citizenship, had failed in a timely fashion to call upon them for help while he was still in Hong Kong.
He suggested that if Xiao had properly anticipated the risk of rendition to the mainland, he could have had in place a plan to publicly alert the media and Canadian authorities, the moment any People’s Republic of China officers made their move. “What this might do is give hesitancy [on the part of Chinese authorities] … they can’t just get you from Central [District] to the border in 10 seconds.”
Instead, Xiao was rolled out of the Four Seasons in a wheelchair, in the company of unidentified men.
“It is uncertain if Xiao was conscious when he left,” a source told Reuters.
The risks faced by most Chinese millionaires may be less dramatic, but Lesperance said the case had some of his Chinese clients thinking, “There but for the grace of God go I.” “Maybe their particular concern is being caught up in a corruption charge. Now, that could be because they are corrupt – or it could be because they are on the wrong side of a power struggle,” Lesperance said.
Either way, “you get a much better chance to defend yourself if you are not already in a Chinese jail.”
How many passports? Eight is enough
There is no suggestion that the U.S.-born octuple-citizen described by Lesperance was similarly fearful of pursuit by American authorities. But his goal – securing safe harbour for himself and his wealth – was broadly the same as Xiao’s.
The client’s intention was to legally insulate himself against future U.S. tax liability, and doing that meant acquiring both alternative nationality and a new home.
His first stop, in the late 1980s, was Cape Verde, although he had no intention of permanently living there. The Atlantic islands are an obscure republic about 600 kilometres west of Africa, notable for volcanoes, stunning beaches and one of the original economic citizenship programs.
And so the businessman obtained his first backup passport, and was able to renounce his U.S. citizenship.
But a Cape Verde passport offered limited benefits in terms of visa-free travel.
Which brought him to Ireland, which at the time was offering instant citizenship in return for a five-year unsecured investment of US$1.7 million. But for all the charms of the Emerald Isle, which included visa-free access to the rest of Europe, it was distant from the businessman’s family.
“So then his situation is that, having renounced his U.S. citizenship, where is he going to sleep? Well, he likes Canada, so he gets Canadian permanent residency,” said Lesperance.
The businessman applied via the federal immigrant investor program, a scheme granting permanent residency in return for a tax-free loan to the government.
Next came the three-year wait to qualify for Canadian naturalization. In the meantime, he collected other citizenships from Central American and Caribbean nations – the Commonwealth of Dominica, Grenada, Belize and St. Kitts – based partly upon the various “marginal increases in visa-free travel” they offered.
But at some stage, citizenship acquisition had become less about the actual benefits and more about the “novelty value,” said Lesperance.
After eventually acquiring Canadian citizenship – and setting up two businesses in Canada that employed about 60 people – the businessman moved to income-tax-free Bermuda, long favoured as a home away from home for rich Americans (including former New York mayor Michael Bloomberg). He lived there to qualify for U.K. citizenship, by virtue of the island’s status as a British Overseas Territory.
“That was a difficult move for him. He quite liked Canada,” said Lesperance.
He now had eight citizenships, including two with the benefits of being European Union members. That was enough. When Lesperance asked if he was interested in acquiring Cypriot economic citizenship (in return for a two-million-euro investment), the answer was, “No, I think I’ve had my fill.”
Why bother with ‘physical presence’ rules at all?
The case of the octo-citizen raises some well-worn questions about economic residency and citizenship. Are participants truly committed to their new country? How much (or how little) time do they spend there?
In Canada, immigrants who arrived under the now-scrapped federal immigrant investor program and its still-running Quebec counterpart have paid woefully low levels of income tax, and breadwinners frequently return to greater China, from where the large majority originated.
Lesperance is critical of the immigrant investor schemes, but he said concerns about rich immigrants spending too little time in Canada are misplaced.
Physical presence is a “misguided fixation” that “does not deal with ‘ghost residents and citizens,’” he said. “Rather it continues to allow those who are contributing little to Canada to acquire Canadian residence and citizenship.”
A copy of Xiao Jianhua’s Antiguan and Barbudan diplomatic passport | South China Morning Post
Antigua and Barbuda Prime Minister Gaston Browne with Xiao
ST. JOHN’S, Antigua and Barbuda – 12th June 2015……Prime Minister of Antigua and Barbuda and Minister of Finance and Corporate Governance the Hon. Gaston Browne on Wednesday appointed Chinese Billionaire Xiao Jianhua as Ambassador-at-Large for Antigua and Barbuda.
Hong Kong’s bustling Central district was quiet in the small hours of January 27, the last day of the Year of the Monkey, when two seven-seater vans quietly pulled up outside the luxury Four Seasons Place serviced apartments. The eve of the Lunar New Year is always a big occasion for family gatherings and the crowds on the streets were thinner than usual.
Five men left the vans at about 1am and went straight into the lift lobby. Moments later, they reappeared on the 28th floor and knocked on the door of mainland billionaire Xiao Jianhua, who was staying in one of the several apartments he had rented there for two years – each costing more than HK$200,000 (US$25,000) a month.
Two hours later, Xiao emerged with two female bodyguards and the five men. They got into the two vans and left the hotel precincts without making a scene. Almost 12 hours later, Xiao and his entourage reappeared at the Lok Ma Chau border crossing between Hong Kong and Shenzhen. They passed through border controls with valid documents and disappeared into the mainland Chinese city at 3pm.
In the weeks since, Xiao has been linked to mainland investigations into top-level bribery and market manipulation and been caught up in the central government’s anxieties about financial and political risks.