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November 24, 2017

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Convictions upheld in case of Chinese bankers who laundered money in Las Vegas

A federal appeals court panel has upheld the convictions of two former Bank of China managers and their wives who stole more than $480 million from a bank and used part of the proceeds to place big bets at Las Vegas casinos.

But the panel of the 9th U.S. Circuit Court of Appeals sent the case back to U.S. District Judge Philip M. Pro of Las Vegas for modification of the sentences and to re-evaluate the order for $482 million in restitution.

The 2009 convictions included racketeering, money laundering, international transportation of stolen property and passport fraud. The scheme involved diversion of money from the Bank of China to make fraudulent loans, purchase property and to finance gambling trips to Las Vegas and other casino locations.

The U.S. Justice Department said the evidence against the Chinese nationals revealed part of the stolen money was processed through transactions at Las Vegas casinos where bets ranged from $20,000 up to $80,000.

In Las Vegas and Macau, they bet millions at the baccarat tables and sometimes spent $4,000 on an evening meal, according to the government. But their rooms were often comped.

The 53-page decision, written by Judge Alfred Goodwin, upholds the convictions of Xu Chaofan, Xu Guojun, Yu Ying Yi and Kuang Wan Fang. Chaofan and Guojun were executives in the Bank of China and diverted the money in the 1990s until the fraud was discovered in 2001.

The two men fled to the United States using false immigration documents and gained U.S. citizenship. They traveled throughout the country with the stolen money. They were aided in the theft by their wives, Ying Yi and Fang.

They were arrested in 2004.

Judge Pro sentenced Chaofan to 25 years in prison and Guojun to 22 years. Their wives received eight-year prison terms.

The appeals panel rejected the defense claim the convictions were invalid. But it said Judge Pro used the wrong standard in sentencing and sent the case back for a correct computation. The panel also said Pro "failed to provide an adequate legal and factual basis for the $482 million restitution order." It directed him to reconsider.

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