April 3 (Bloomberg) -- Li Huabo, a former local government official accused of a 94 million yuan ($15 million) fraud in China, was sentenced to 15 months in jail for receiving stolen money in his Singapore bank accounts.
Judge Siva Shanmugam said Li’s crimes involved some degree of sophistication when handing down his verdict and sentence yesterday after an 18-day trial. Li’s bail was doubled to S$160,000 ($129,292) pending a possible appeal.
Li had testified he was coerced into making a confession to police that he masterminded a scheme to embezzle the funds. The former section director at Poyang county’s finance bureau in China’s southeastern Jiangxi province had denied three charges of receiving S$182,700 in stolen money in his Singapore accounts, claiming he was framed by former co-workers. The case had received prominent media coverage in China.
“This kind of phenomenon attracts considerable attention because it might show that corruption runs so deep that even cadres at such a low level can accumulate wealth at such a size,” said Joseph Cheng, a political science professor at City University of Hong Kong.
Chinese prosecutors investigated 47,338 cases of official misconduct in 2012, 5 percent more than the previous year, and recovered 8.8 billion yuan. Since the 1990s, about 18,000 officials and state employees have left with some 800 billion yuan, according to a report by the Chinese central bank that briefly appeared on its website in 2011.
Global Financial Integrity, a Washington-based anti-money-laundering watchdog group, estimated that $3.79 trillion in illicit funds flowed out of China from 2000 to 2011.
Li, 51, will appeal the verdict, his lawyer Subhas Anandan said yesterday. Anandan had argued for a shorter sentence, given the amount of money and his age. Prosecutor Luke Tan had asked for a jail term of 14 to 18 months.
Setting up the use of bank accounts in Singapore to funnel dirty money across international boundaries is deplorable and “could result in Singapore gaining an undesirable reputation as a haven for money laundering,” Tan said.
Judge Shanmugam had rejected Li’s allegations of coercion and ruled that his confessions were voluntary.
For each charge, Li could have been jailed for as long as five years and fined an unspecified amount. Li claimed his personal wealth including S$1.5 million used to obtain his Singapore permanent residency and a S$1.3 million three-bedroom apartment in the city-state was built through businesses on the sidelines and not by siphoning public funds.
“There were no embezzled funds at all,” Li said when he took the stand in February, rejecting the prosecutor’s claim that he plotted with his co-workers to steal from the county. “They were all my own money.”
Li allegedly set up a shell company in 2006 and used bogus government seals and fake invoices to steal millions, Tan said at the trial.
Li was arrested in March 2011 after Singapore police acted on a tip-off from his remittance agent and a request from Beijing via Interpol. Singapore and China don’t have an extradition treaty.
Li’s hometown Poyang is one of China’s poorest counties and named after what was once the country’s largest freshwater lakes before drought and dams shrunk it from 4,000 square kilometers to 200.
Outside of his official job at the finance bureau which paid him 3,000 yuan a month, Li traded coal, cotton and fertilizer, ran a tourist agency organizing trips to Macau, and had a 42 percent stake in an oil refinery. Li said he made about 100 million yuan in three years from his investment in the oil refinery business.
Local Chinese government party officials set up a task force, dubbed the “2-11 team” after Feb. 11, when Li allegedly called a colleague, confessing to stealing from the government. Li said he never made such a call, which was part of a setup to frame him.
On Feb. 17, 2011, state-run news agency Xinhua published a report with a hand-drawn picture of Li that was broadcast on major state-run television stations.
The investigation netted 57 people, including the finance bureau chief who was sentenced to 19 years in jail for his role in the embezzlement.
The criminal case is Public Prosecutor v Li Huabo. DAC2868-70/2012. Singapore Subordinate Courts.
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