Ex-Banker Pleads Guilty in Olympus Fraud CaseBob Van Voris
A former Commerzbank AG and Societe Generale SA banker admitted to aiding Olympus Corp.’s $1.7 billion accounting fraud.
Chan Ming Fon, a Taiwanese citizen, pleaded guilty to a single charge of conspiracy to commit wire fraud in a hearing today in Manhattan. Chan, who was arrested Dec. 20 in Los Angeles, is cooperating with the government’s investigation in hopes of leniency.
Chan admitted conspiring with officials at the Tokyo-based maker of cameras and medical equipment to hide losses from investors in a phony transaction in 1999 that was intended to conceal debt.
“I acknowledge that my conduct was wrong,” Chan, speaking through an interpreter, told U.S. District Judge Laura Taylor Swain.
Chan, who was indicted Jan. 17, faces as many as five years when he’s sentenced. Swain told him he may be deported from the U.S. after he serves his sentence.
Olympus in 2011 restated five years of earnings and took a $1.3 billion cut in net assets after the company admitted it paid inflated fees on takeovers and overpaid for three companies to conceal past investment losses. Last year, three former Olympus executives including ex-Chairman Tsuyoshi Kikukawa pleaded guilty to their roles in the accounting fraud.
The losses at Olympus were exposed by Michael Woodford a few months after he was appointed as the company’s first non-Japanese president in 2011. Chan testified in a Japanese inquiry into the Olympus scandal, his lawyer, Christine Chung, told Swain in January.
Chan appeared in court today wearing tan jail fatigues and sneakers. Swain granted a joint request by Chung and prosecutors that he be released on $3 million bond, to be secured by $1.5 million in cash and the $200,000 equity in his sister’s California home, where he plans to live until his sentencing.
Chan, who lived in Singapore, was arrested when he took his family to Los Angeles on vacation, the first time in 16 years he’d been in the U.S.
The case is U.S. v. Chan, 13-CR-52, U.S. District Court, Southern District of New York (Manhattan).