Chinese woman charged with fraud remains in jail

Updated: 2015-03-31 06:03

By LINDA DENG in Seattle(China Daily USA)

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Zhao Shilan, who with her ex-husband has been charged with money laundering and immigration fraud based partly on information from Chinese investigators, remains in jail in Washington state and will appear at a hearing on April 6 in Los Angeles where she was indicted.

Kirk Davis, Zhao's attorney, said Zhao was to be released on Monday, March 20, after a federal hearing in Seattle, but the US government filed an appeal against the move and she is being held without bond.

On March 17, a grand jury indictment in US District Court in Los Angeles charged Zhao, 51, and Qiao Jianjun with three counts of money laundering and immigration fraud. They are accused of fraudulently obtaining EB-5 immigrant-investor visas to enter the United States and launder money from China. Zhao was arrested at her home in Newcastle, Washington, just outside of Bellevue. Qiao, 51, has not been found.

The US government is considering deporting Zhao to China, but her lawyer, Davis, opposes the move, saying she fears she will be arrested and tortured to reveal the whereabouts of her ex-husband.

The Chinese government, which assisted in the case, has targeted corrupt officials since President Xi Jinping came to power in 2012, and has asked the US to help find fugitives who have fled to here with money and return them and their money to China. The US does not have an extradition agreement with China, but alternatives to extradition exist, US officials say, including deportation for violations of US immigration law.

In a story on March 28, the Vancouver Sun traced Zhao's purchase of a British Columbia company and acquisition of properties in which to invest.

"Flush with money that she and her ex-husband, Qiao Jianjun, had moved from China through banks in the mainland, Hong Kong and Canada, Zhao first bought a Richmond condo, paying for it outright. A few months later, on a return trip, she bought a five-bedroom White Rock home, also paying for it outright," the newspaper reported.

Zhao recently put the White Rock property up for sale for $689,000, the Sun said. A search of property and title records conducted by the Sun show that Zhao's company bought the properties outright. However, a few months later, it took out mortgages on both, totalling $1.1 million, that represented almost their entire market value. According to the US indictment, a few weeks later Zhao and Qiao took money from their Canadian RBC account to pay for a Bellevue home.

Officials allege that Qiao embezzled the money from a Chinese grain warehouse, China Grain Reserves Corporation, also known as Sinograin, that he directed in Henan province.

When the divorced couple applied for the investor visas, they falsely claimed they were married and declared that the $500,000 they invested through EB-5 was obtained lawfully, officials said.

When she applied for her EB-5 visa, Zhao listed Qiao as her husband. She also said her investment funds were cash advances from two Chinese flour companies that she partly owned. Later, Qiao filed paperwork with the US immigration agency in which he said he was married to Zhao.

In 2009, the two received visas as a couple, and they came to the US that October. In mid-2011, Zhao applied to have her green card made permanent.

By early 2012, the pair had about $2.2 million in laundered funds deposited in a Canadian bank account, according to officials. Using a portion of those funds, that August they bought a four-bedroom house in Newcastle for $525,000 under the name S&O Investments LLC.

Officials say legal papers indicate Zhao owned 98 percent of the company and a son owned 2 percent. The couple has two sons, one studying at a college in Toronto, the other a teenager in Newcastle.

Assistant US Attorney Ronald Cheng in Los Angeles said the federal government could ask a court to allow the Newcastle house to be seized to help pay the Chinese government for its losses.

Earlier this month, Chinese prosecutors, acting as part of the anti-corruption crackdown launched by Chinese President Xi Jinping, gave the US State Department a "priority list" of 150 people it wanted help in finding and in repatriating monies they allegedly embezzled, as well as the people. It is not known if Qiao and Zhao are on that list, the Sun said.