Sunday, March 29, 2015


According to confirmed information from China, there is a "priority list " of more than 150 corrupt Chinese PEPs, all wanted on criminal charges by the Peoples' Republic, and believed to be living in the United States. Deemed "Economic Fugitives' by China, they are accused of money laundering, and other major crimes, in their native country.

Reports indicate that the United States is actively seeking out these individuals; though it appears that Federal criminal charges have only been filed against two of them to date. There is no extradition treaty between the US and China at present, and any extradition request would raise issues of whether a fair trial would be granted, and whether the death penalty was being considered. Money launderers have frequently been executed in China, and laundering was conspicuously missing from reform legislation in China, where some white-collar crimes were declared no longer subject to the ultimate penalty. The death penalty has never been available in the US for money laundering offenses, and this is an obvious sticking point with the Department of Justice. We have previously covered the use of capital punishment in China for money laundering offenses.

 The names on the list of 150 have not been released to the public, which creates an identification issue for US financial institutions, since it is believed that these fugitive PEPs have accounts with US retail banks. Given that in the active case involving those Chinese PEPs known to have been charged, the defendants lied about the source of funds, which was embezzled from a state-run funds. They alleged that the money, which was used to purchase real estate in British Columbia, was from the sale of two privately-owned corporations, and hid their PEP status. They moved the money into the US through shell companies.

It is suggested that you conduct a comprehensive review of all your large expat Chinese account holders, especially those who have moved into the United States during the past five years, to rule out your clients as possible fugitives from justice, banking dirty money in your shop.

 Canadian bankers please note that real estate inside Canada was the investment of choice in the one known case, even though the PEPs resided in the United States. You may also want to revisit your newest Chinese clients, especially those with millions of dollars in liquid assets, on deposit in Canadian banks, or invested in real estate.

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