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3 Former Staff of Tycoon Guo Wengui Sentenced to Prison in Fraud Case

By Song Shiqing
Three former employees of Chinese fugitive tycoon Guo Wengui, above, were sentenced to prison on Friday for obtaining loans and foreign currency with fraudulent documents under Guo’s instruction.
Three former employees of Chinese fugitive tycoon Guo Wengui, above, were sentenced to prison on Friday for obtaining loans and foreign currency with fraudulent documents under Guo’s instruction.

Three former employees of Chinese fugitive tycoon Guo Wengui were sentenced to prison on Friday for obtaining loans and foreign currency with fraudulent documents under Guo’s instruction, the official Xinhua News Agency reported.

Lü Tao, the former deputy general manager of Beijing Pangu Investment Co., a property company controlled by Guo, was sentenced to two years and three months. Yang Ying and Xie Honglin, the company’s former chief financial officer and a former senior financial manager respectively, both received two-year sentences with three years of reprieve.

The court in the northeastern city of Dalian also fined Beijing Pangu 245 million yuan ($36 million).

Guo, who is believed to be living in the United States, has been described by China’s Foreign Ministry as a “criminal suspect.” He fled China in August 2014 amid corruption probes into his business associates. In January 2015, his close ally Ma Jian was removed from his post as vice minister of state security and put under investigation by the country’s top anti-corruption watchdog. Guo’s assets in China were frozen.

In meting out its punishment, the Dalian Xigang People’s Court said it had shown leniency to both the company and the defendants. The company has returned all the loans involved, and the three people who said they broke the law under Guo’s instruction were all identified as only accessories, while Guo was the person directly responsible, the court said.

The defendants all accepted their respective sentences and decided not to appeal.

The three stood trial in the court on June 9, when they said Guo instructed them to fake company contracts, stamps, and associated materials to secure a loan of 3.2 billion yuan from Agricultural Bank of China in 2010.

Lü and Xie also pleaded guilty to faking documents to buy $13.5 million of foreign currency. According to their testimony, Guo used the loans and currency to buy a major stake in a securities company and purchase a private jet in Hong Kong.

The trial is the first criminal case involving Guo’s company since Interpol issued a “red notice” for Guo at Beijing’s request. Prosecutors are preparing to bring three lawsuits against suspect former staffs in Guo’s companies, including Beijing Pangu and Beijing Zenith Holdings Co. Ltd., Xinhua News Agency reported, citing unnamed source.

Contact reporter Song Shiqing (shiqingsong@caixin.com)

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