Fraudster’s wife told to pay bank $670M
LAWSUIT: Chinese couple laundered money in B.C.
A B.C. Supreme Court judge ruled the wife of a Chinese bank manager who executed a massive fraud and fled to B.C. is “accountable for the whole of the loss” suffered by the Bank of China and must pay the bank $670 million.
Bank of China launched the civil case against Xu Chao Fan, his wife, Kuang Wan Fang, and his mother, Tan Wen Jing, in 2001. The three were key defendants among a large group of blood relatives who live or lived in B.C. and laundered stolen money in B.C. banks and real estate.
Xu Chao Fan and two other bank managers, the principal fraudsters, fled to Canada from Hong Kong in October 2001 after Hong Kong authorities started to freeze their bank accounts.
For 10 years they had been stealing from the Bank of China and funnelling assets through a “window company” into technology stocks, B.C. bank accounts and assets, casinos in Las Vegas, and international tax havens.
In 2001 Hong Kong authorities told Canadian officials they were able to seize millions sent to a Las Vegas casino ,but the three bank managers “arranged for a lot of available money to be removed to Canada … it is suspected a lot more has already left.”
The RCMP obtained a warrant to access the bank accounts of 14 relatives involved in the case, many living in the Vancouver area.
In his April 16 ruling, B.C. Supreme Court Justice Ronald Skolrood ordered Kuang to pay $670 million to the Bank of China, saying she knowingly assisted her husband and others to hide the fraud, and to disperse and launder the money.
“I am satisfied that there is a sufficient link between her conduct and the Bank’s loss due to the fraud perpetrated by the principal fraudsters to warrant making her accountable for the whole of the loss,” Skolrood wrote. “It is clear that her assistance was not directed toward only a few discrete transactions, rather she was engaged in assisting the overall pattern of fraud.”
Skolrood said the mother, Tan, was “at best reckless or wilfully blind” to large sums of money passing through her bank accounts, and ordered her to pay more than $2.5 million.
The case involved a B.C. forensic accountant, Pat McParland, who tracked money from Tan’s bank account to the purchase of a $350,000 condo in Toronto.
In McParland’s opinion, analysis of Tan’s transactions revealed a number of “indicators of money laundering” including: conversions of large sums of money from small to large denominations; conversions of large amounts of foreign money into Canadian dollars; movement of funds offshore; rental of safety deposit boxes and purchase of bank drafts for no apparent legitimate reasons.
The case also illuminated how “red packets” — which can often be seen being distributed by B.C. politicians at festivals — are used and understood in Chinese culture.
Tan claimed some of her questionable bank assets related to unreported “red packet” gifts.