Ex-banker admits role in Olympus fraud case

Former executive says he helped conceal the company's assets that had been liquidated

PUBLISHED : Friday, 20 September, 2013, 12:00am
UPDATED : Friday, 20 September, 2013, 4:09am

A former Singaporean banker pleaded guilty in federal court in to helping Japan's Olympus orchestrate a US$1.7 billion accounting fraud.

Prosecutors said Chan Ming Fon helped to secretly liquidate hundreds of millions of dollars of Olympus investments over six years and then lied to auditors, certifying the investments still existed.

Chan, 50, described through an interpreter in court how he provided false information to an auditor about an Olympus-backed investment portfolio he managed. He said he led the auditor to believe the portfolio was safe, when the assets had actually been liquidated and transferred to another entity to repay an undisclosed loan.

"I know that I participated in the previously described transactions, and I acknowledge that my conduct was wrong," said Chan, who pleaded guilty to one count of conspiracy to commit wire fraud.

Before working for Olympus, Chan was a banker at Commerzbank and Societe Generale.

He was the first executive from outside Japan to be indicted over the accounting scandal at Olympus, a 93-year-old maker of cameras and medical devices.

The accounting fraud was exposed in 2011 by former chief executive Michael Woodford, who was fired after questioning accounting transactions later found to have been used to hide losses. Olympus eventually admitted it used improper accounting to conceal investment losses and restated five years of financial results.

Chan was arrested in Los Angeles in December. He is co-operating in a continuing investigation and will be released on a US$3 million bond.

The court scheduled Chan to be sentenced on January 10. He faces a maximum of five years in prison.