Los Angeles-Area Executive Arrested in $9 Million Bank Fraud Scheme
| U.S. Department of JusticeFebruary 24, 2015 |
A Los Angeles-area executive was arrested today in connection with a $9 million scheme to defraud United Commercial Bank and East West Bank, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California, Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP), Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office and Special Agent in Charge Erick Martinez of the IRS-Criminal Investigation’s (IRS-CI) Los Angeles Field Office.
Chung Yu “Louis” Yeung, 37, of San Dimas, California, was indicted on Oct. 22, 2014, in the Central District of California for one count of conspiracy to commit bank fraud and five counts of bank fraud. The indictment was under seal until his arrest today. Guo Xiang “David” Fan, 52, was also indicted for conspiracy to commit bank fraud and bank fraud, as well as money laundering, and remains at large.
According to the indictment, Yeung was Vice President and Fan was President of Eastern Tools and Equipment, an Ontario, California company that sold portable generators and other equipment. The indictment charges Yeung and Fan with defrauding United Commercial Bank (UCB) and East West Bank, which took over UCB’s accounts, of more than $9 million.
Specifically, the indictment alleges that Yeung, Fan, and others overstated Eastern Tools’ accounts receivable to increase its line of credit with UCB and later East West. To support the inflated accounts receivable submitted to the banks, Yeung, Fan, and others allegedly opened approximately 20 shell companies, backstopped with fictitious business name statements, post office boxes, bank accounts, and telephone numbers. They then allegedly moved money from Eastern Tools’ bank accounts into the shell companies’ bank accounts to create the false appearance of substantial commercial activity. Finally, Yeung, Fan, and others allegedly siphoned those funds into their own personal accounts.
East West Bank allegedly sustained a loss of approximately $9,157,172 as a result of the fraud scheme.
In November 2008, UCBH Holdings, Inc., UCB’s parent company, received $298.7 million in federal taxpayer funds through the U.S. Department of the Treasury Troubled Asset Relief Program (TARP). On Nov. 6, 2009, UCB failed and was taken over by state and federal regulators. As a result of the bank’s failure, none of the TARP funds were repaid, and the $298.7 million TARP investment has been written-off.
The charges contained in an indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by SIGTARP, the FBI and IRS-CI, and prosecuted by Trial Attorney Fred Medick of the Criminal Division’s Fraud Section.
This content has been reproduced from its original source.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.