DLA Piper (Canada) LLP successfully aided the Bank of China in bringing to justice the last two participants in a global scheme to launder millions of dollars stolen from the Bank. In a civil judgment released on April 16, 2015 in Bank of China v. Xu Chao Fan, the British Columbia Supreme Court ordered one of the defendants to pay the Bank CAD $670 million, and held the other liable for over CAD $2.5 million. This is a precedent-setting case – in result, in amount, and in the process by which the case was proven in court.

The money laundering scheme originated in a US $500 million fraud on the Bank perpetrated by three management employees of the Bank’s Kaiping branch between 1992 and 2001. The British Columbia case was just one of various proceedings around the world stemming from the fraud and money laundering. The main architect of the scheme, Xu Chao Fan, is currently serving a jail sentence in the United States. It was his wife, Kuang Wan Fang, and his mother, Tan Wen Jing, who were the defendants in the British Columbia case. Although their participation in the scheme was more remote, the court concluded they had knowingly assisted in laundering some of the stolen funds into Canada.

After obtaining a pre-trial ruling, the Bank was able to prove its claim largely through judgments previously granted in proceedings in Hong Kong and Nevada that had dealt with various aspects of the fraud and money laundering scheme. As a result, the trial took only six days. Canadian common law was found to be sufficiently flexible to permit the victim of a global crime to recover the Canadian assets of the fraudsters.

The DLA Piper (Canada) LLP team who represented the Bank of China included Vancouver partners Monika Gehlen, Ross Clark Q.C., and Jeffrey Horswill, and associate Johanna Goosen who assisted in the matter.