CAPITALISM'S ACHILLES HEEL Dirty Money and How to

Dirty Money at Work 149
were reportedly worth some $100 million at their peak during the 1997 “red
chip” boom prior to the British handover of Hong Kong to China. Afterwards,
the value of Xu’s portfolio plummeted, as he seems to have had a
knack for picking bad investments.
In 2001 Xu and his accomplices began transferring money to the
United States: $200,000 to Citibank in San Francisco and $10.5 million to
casinos in Las Vegas. 201 Upon fleeing China using fake travel documents,
they also made large deposits at the Vancouver and Richmond branches of
the Royal Bank of Canada, the Canadian Imperial Bank of Commerce, and
the Hong Kong Shanghai Banking Corporation. 202
Chinese authorities asked for U.S. cooperation. Xu was arrested in San
Francisco in December 2000 for passport fraud. He was then taken to Las
Vegas where in 2004 he pleaded guilty to misappropriating public funds, a
crime in the United States under the Patriot Act. FBI and Immigration officials
handed Xu over to authorities at the Beijing airport in April 2004. As
of this writing, his two partners in crime are still on the run, probably in the
United States or Canada.
The biggest embezzler in Chinese history, plying his craft for more than
a decade, was 41 years old when he was returned to face punishment. Bank
of China is probably wondering how many more young managers are ripping
off the people’s money.
Po Sang Bank. “Possibly the largest money-laundering case ever prosecuted
anywhere.” 203 Hong Kong court proceedings in 2004 were off to a
dramatic start. The territory’s Independent Commission Against Corruption
put a figure of up to HK$50 billion (US$6.4 billion) on the indicted
ring’s haul.
Complex transactions? Sophisticated techniques? Hardly. This group
simply packed up currency notes in mainland China and hauled them to a
moneychanger, Guardecade, in Hong Kong. Three mainland syndicates
used couriers to smuggle billions in criminal proceeds and corporate embezzlement
across the border. Plastic bags full of notes, in reportedly 29 different
currencies, 204 were delivered and converted into Hong Kong dollars.
Guardecade then deposited the HK dollars at Po Sang Bank.
But you can’t just walk in with HK$50 million or so a day without raising
suspicions. You need the services of branch manager Lam Yiu Chung.
Lam entered the deposits into the bank’s own suspense account, a temporary