China North East Petroleum Executive’s Case Ends in Mistrial

A fraud case against a former vice president of China North East Petroleum Holdings Ltd. ended in a mistrial after jurors failed to agree on charges that he was part of a scheme to divert share offering proceeds, according to court records.

Jurors in the case against Chao Jiang in federal court in Washington today told the judge that they couldn’t agree on the securities and wire fraud charges, which were filed last year and stemmed from a U.S. Securities and Exchange Commission case in 2012, according to court records.

The SEC claimed that company insiders made $59 million without proper disclosures through diversions from offering proceeds.

CNEP was a Nevada corporation formed to undertake exploration, drilling and production in China, with principal offices in New York and California, according to court filings. The company was formed through a reverse merger with a U.S.- based shell company in 2004, according to court filings. Its shares were delisted by the New York Stock Exchange in July 2012.

The case is U.S. v. Hongjun, 13-cr-00152, U.S. District Court, District of Columbia (Washington). The SEC case is is SEC v. China Northeast Petroleum Holdings Ltd., 12-cv-08696, U.S. District Court, Southern District of New York (Manhattan).

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