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Former fugitive stands trial for financial fraud

By An Baijie in Beijing and Zhou Huiying in Harbin | China Daily | Updated: 2013-09-30 08:05

Gao Shan, a fugitive in a financial fraud case who surrendered to police last year, stood trial with six other suspects at a court in Heilongjiang province on Sunday.

Gao, former head of a branch of the Bank of China on Hesong Street in Harbin, the capital of Heilongjiang, was charged with collaborating with the other suspects on planning and executing a fraud between 2000 and 2004, which led to a loss of 1 billion yuan ($163 million).

The Harbin Intermediate People's Court heard the case on Sunday, and the trial is scheduled to continue on Monday.

Prosecutors said the suspects illegally used 2.8 billion yuan of deposits from 26 clients, eventually returning 2 billion yuan but causing an economic loss of 800 million yuan. Gao was also charged with permitting loans of 800 million yuan to five car sale companies controlled by another two suspects, bringing an additional 200 million yuan loss.

The other suspects were also charged with crimes that include blackmail, offering bribes and drug dealing, according to a statement released by the court.

Na Yelin, Gao's defense lawyer, declined to comment when contacted by China Daily on Sunday.

The case was exposed in January 2005, when the accountants of Northeast Expressway, one of Gao's clients, reported that more than 293 million yuan had disappeared from the company's bank account.

Several other customers of the bank also reported the disappearance of huge amounts from their accounts.

Gao and Li Dongzhe, another suspect in the case, fled to Canada at the end of 2004 before the case was exposed. In 2007, Canadian police arrested Gao, who had become a Canadian citizen. In 2012, he voluntarily turned himself in to Chinese police. Li also turned himself in.

While staying in Canada, Li allegedly made phone calls to blackmail officials he had bribed, according to a report in Legal Mirror in August.

The case sent shockwaves through the banking sector and, along with other corruption scandals, led to a large-scale personnel reshuffle by the China Banking Regulatory Commission in its local branches, according to Xinhua News Agency.

In December 2007, Zhang Xiaoguang, former board chairman of the State-owned Northeast Expressway, was sentenced to death with a two-year reprieve after being convicted on five counts of corruption, including bribery.

Prosecutors claimed in their indictment that Zhang deposited funds from his company at the BOC Hesong Street Branch after having accepted bribes of 7 million yuan from Li Dongzhe, which eventually led to the loss of the State-owned company's money.

The government has been cracking down on fugitives who fled overseas in recent years. More than 500 suspects of economic-related crimes, including 76 government officials, were captured abroad during the past five years, the Ministry of Supervision announced in November 2012.

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