Three Gorges Probe

Fraudster expelled over $202m credit scam

(February 7, 2006) Beijing has expelled a Chinese-American woman sentenced to life in prison for credit fraud involving nearly US$26 million linked to the Three Gorges project.

A Chinese-American woman has been expelled by the mainland after being sentenced to life in prison for credit fraud involving nearly US$26 million (HK$202 million). Li Xiaoyuan was convicted by a Beijing intermediate court recently for falsifying documents and official seals to obtain 14 letters of credit from two Chinese banks, the newspaper Jinghua Times reported. She was expelled from the country immediately after the verdict, it said. Also convicted in the case was You Weijian, a manager of the Yangtze Three Gorges Development Company, an affiliate of the China Three Gorges Economic Development Corporation, the paper said yesterday. You was sentenced to 12 years in prison for helping Li falsify foreign trade contracts, credit application forms and related credit documents, the paper said. Through letters of credit issued by the Bank of China and the Construction Bank of China, the two received US$25.7 million in funds from banks outside China, it said. Officials at the US Embassy in Beijing said they were aware of the case, but were unable to provide further details. The Three Gorges Dam, the biggest hydroelectric dam project in the world, has already been riddled with corruption, including the embezzlement of funds for the relocation of nearly a million people to make way for the dam. American engineer Fong Fumin was sentenced by a Beijing court last week to five years in prison for stealing state secrets related to business opportunities in China’s energy sector. Fong, however, has not been expelled from China despite pressure from the US Government.

Agence France-Presse, February 7, 2006

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