20 charged with money laundering

A total of 20 defendants in Southern California were charged in connection with international money laundering in the US, China and four other countries, according to three indictments unsealed by the US District Court for the Central District of California in Los Angeles.

Fifteen of the defendants were arrested last week and 13 of them have been released on bond and scheduled for trial in February. The other two were scheduled for a later arraignment. Another five defendants are still being sought by authorities.

The cases are the result of an investigation called Operation "Phantom Bank" conducted by the FBI, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the IRS Criminal Investigation.

One of the three indictments described a series of money laundering schemes that revolved around Tu Chau Lu, 71, of Fullerton, California, who was president and CEO of Saigon National Bank, a publicly-held bank based in Westminster, California, from 2009 to January 2015.

Lu was alleged to use his insider knowledge, position at the bank and network of connections to promote and facilitate money laundering transactions involving members and associates of criminal organizations, according to the indictment which named 16 defendants, including Lu.

In one scheme, Lu allegedly played a critical role in introducing to an undercover informant the Sinaloa drug cartel who wanted to move millions of dollars in cash every month from Mexico to Hong Kong in July 2011. Lu asked the informant to give a cut of the money laundering transactions based on his role.

The indictment alleges that members of the organization discussed laundering hundreds of millions of dollars. The actual money laundering transactions involved a total of $3.75 million.

Four other defendants named in the two separate indictments include Jian Sheng Tan, 48, of Temple City, Derrick Cheung, also known as Chang Zhang Ying, 39, of Rowland Heights, Ruimin Zhao, 45, also of Temple City and Vivian Tat, 51, of Hacienda Heights.

They were charged with accepting money from an undercover operative and, in exchange for a fee, converting the money to cashier's checks and money orders, despite their knowledge of the transactions representing unlawful activities.

"Investigations of financial institutions and individuals who willingly violate US laws and regulations are vitally important to the integrity of our banking system," said Erick Martinez, special agent in charge of IRS Criminal Investigation's Los Angeles Field Office, in an earlier statement. "Those affiliated with financial institutions who abuse their positions to launder the proceeds of drug trafficking, illegal weapon sales and bribery will be held accountable."

The charge of money laundering carries a statutory maximum penalty of 20 years in federal prison.

liazhu@chinadailyusa.com