Feds charge eight in $80 million import-export fraud case
The U.S. Justice Department said eight defendants have been charged in connection with an $80 million scheme to defraud the Export-Import Bank of the United States.
Prosecutors Friday identified the defendants as Daniel Curran, 52; Edward Chua, 55; David Villongo, 51; Jaime Galvez, 51; Christina Song, 49; and Robert Delgado, 46, all residing in California. Two of the accused, Marilyn Ong, 51 and her nephew Ildefonso Ong, 43, reside in the Philippines, according to prosecutors.
The Justice Departments said the charges stemmed from a scheme involving $80 million worth of fraudulent loan transactions between companies located in the Philippines and United States lending banks, in which the Ex-Im Bank acted as guarantor or insurer.
As part of the scheme, a loan broker in the Philippines assisted borrowers in executing loan agreements with the lending banks and in obtaining loan guarantees or insurance policies from the Ex-Im Bank as part of the loan agreements.
The loan broker then recruited U.S. exporters for the purpose of purchasing U.S. goods and shipping those goods to the Philippine borrowers, and then instructed the exporters to prepare false shipping documents and submit those false documents to the lending banks to make it appear that they had purchased and shipped goods.
The Justice Department said, in reality, the exporters did not purchase the goods called for in the loan agreements, and instead misappropriated a majority of the loan proceeds.
Five of the accused — Curran, Chua, Galvez, Song and Delgado — pleaded guilty to charges including conspiracy to defraud the U.S. and mail fraud, prosecutors said. Each has agreed to accept sentences of up to 40 years in prison, pay fines and to forfeit property. Prosecutors also charged the two Ongs with one count of conspiracy to defraud the U.S., four counts of submitting false statements to Export-Import Bank, four counts of mail fraud and nine counts of money laundering.
The Ex-Im Bank, an independent U.S. agency, is the official export credit agency and issues loan guarantees and insurance to U.S. banks on behalf of creditworthy foreign companies for the purpose of purchasing U.S. goods. Once the Ex-Im Bank issues a loan guarantee or insurance policy, if the foreign borrower defaults on its loan repayments, the Ex-Im Bank pays the lender the amount of the outstanding loan.
The criminal investigation was initiated by the Ex-Im Bank when it submitted a criminal referral to the Justice Department.