China says 18 fugitives linked to financial crimes now captured in overseas manhunt

Those arrested include two bank fraudsters who surrendered to Cambodian authorities

PUBLISHED : Thursday, 14 August, 2014, 4:05pm
UPDATED : Thursday, 14 August, 2014, 4:34pm

Two men wanted in connection with 73 bank fraud cases recently surrendered and returned home from Cambodia after hiding abroad for 10 years, according to China’s Ministry of Public Security.

The two are among 18 suspects of major economic crimes who have been arrested and repatriated since a special operation was launched on July 22 to hunt down corrupt officials and criminal suspects hiding overseas, the ministry said in a statement today on its official website.

The men, surnamed Zhu and Kong, as well as seven other associates, fled abroad in 2004.

They lured 35 companies to deposit large amounts of funds in a designated bank by promising high interest. Then they conspired with bank employees to transfer the funds to the suspects.

The gang’s crimes involved five banks (and 13 different bank branches) and spanned from January 2002 to July 2004. It totalled 73 fraud cases and caused “huge economic losses”, the statement said.

The statement did not mention how much the group stole. But in a single case in July 2003, the gang swindled 150 million yuan (HK$189 million) from a bank branch in Taiyuan, Shanxi province.

"Under huge pressure from police, Zhu made contact and said the two were willing to negotiate with police in Cambodia to give themselves up,” the ministry said.

In December 2004, Interpol issued a red notice, which acts like an international arrest warrant, for the two.

Over the past decade, the Chinese police had seized six suspects by cooperating with counterparts from Indonesia, Thailand, the Philippines, and territories Hong Kong and Macau.

A significant number of Chinese citizens who have fled abroad with illegally acquired funds over the past decade are corrupt government officials and senior executives from financial institutions or state-owned enterprises, according to a survey by Caijing magazine.

Last November, 68-year-old Yu Guorong, former head of Bank of China’s Jiulongpo branch in Chongqing, was sent back to China from Thailand, after being a fugitive abroad for 14 years. Yu was wanted over links to a nearly 3 billion yuan bank fraud case.

On August 19 last year, Chen Yi, head of Shanghai’s largest insurance agency Fanxin, was caught in Fiji and escorted back to China by police officers. Chen allegedly fled to Canada with 500 million yuan stolen from the company, according to local reports.

The arrest came four days after the China Insurance Regulatory Commission said Fanxin had sold unauthorised wealth management products.

The Guangdong Provincial People’s Procuratorate said officials intending to flee abroad with massive bribes would first ensure that their spouses and children have emigrated to another country, the Southern Metropolis Daily reported.

The officials can be working for the government or state-owned enterprises.

Then they would transfer huge sums of money abroad through Hong Kong and Macau via various channels, including false trades between Guangdong and Hong Kong, smuggling cash and using “underground” banking services, the prosecutor’s office said.

The last step would be fleeing abroad themselves after allegations against them surface.

Under new rules in January, officials with family overseas – dubbed “naked officials” – are no longer considered for promotion.