May 7 (Bloomberg) -- Two former Bank of China Ltd. managers, convicted last year of defrauding the lender of $485 million, were each sentenced to more than 20 years in jail by a Nevada court.

U.S. District Judge Philip Pro in Las Vegas yesterday sentenced Xu Chaofan to 25 years and Xu Guojun to 22 years in prison, the Justice Department said in an e-mailed statement. Pro sentenced the former bank managers’ wives, Kuang Wan Fang and Yu Ying Yi, to eight years each.

A grand jury in Las Vegas last year convicted the couples of defrauding Bank of China, racketeering, money laundering, transporting stolen property, and passport and visa fraud. The former bank managers created shell corporations in Hong Kong, and funneled money through those companies as well as bank and investment accounts in Canada and the U.S., prosecutors said.

“Despite the best efforts of these defendants to avoid detection, their scheme first to steal nearly $500 million from a Chinese bank, and then to hide themselves and the money in the United States, was exposed,” Assistant Attorney General Lanny A. Breuer said in the statement.

Prosecutors claimed the couples emigrated to the U.S. using false identities, and presented evidence of their transactions at Las Vegas casinos, including bets of as much as $80,000.

The two men and their colleague, Yu Zhendong, former employees of Bank of China at its sub-branch in Kaiping County in southern Guangdong province, laundered funds through Las Vegas and Macau, and then used fake passports to flee to Canada in October 2001, the Chinese bank said in 2002.

Plea Bargain

Yu accepted a plea bargain and returned to China in 2004, where he was convicted of embezzlement. His wife was allowed to remain in the U.S. to look after their children, according to yesterday’s Justice Department statement.

“Bank of China supports the U.S. court ruling. It requires international cooperation to fight all types of cross-border crime,” the bank’s Beijing-based spokesman Wang Zhaowen said by telephone today. The bank will continue to seek to recover all the assets misappropriated and protect its legal rights, he added.

China’s banking regulator is stepping up efforts to prevent irregularities and fraud in the country’s financial institutions, after they contributed to a surge in bad loans over the past decade.

Bankers Jailed

Several senior bank executives including Liu Jinbao, former chief executive of Bank of China’s Hong Kong operations, and Wang Xuebing, who headed China Construction Bank Corp., have been sentenced to prison terms on corruption charges in recent years. Wang Yi, a former vice president of China Development Bank, was arrested in January for allegedly accepting bribes.

Mitchell Posin, an attorney representing Xu Chaofan, and Bret Whipple, a lawyer representing Xu Guojun, didn’t immediately return calls seeking comment.

Lawrence Jay Litman, a lawyer representing Kuang Wan Fang, and Travis Shetler, a lawyer representing Yu Ying Yi, didn’t immediately return calls seeking comment after business hours.

The case is U.S. v. Xu, 02-674, U.S. District Court, District of Nevada (Las Vegas).

To contact the reporters on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

Last Updated: May 7, 2009 09:02 EDT