Ex-bank executive pleads guilty in Olympus fraud
NEW YORK (AP) — A former bank vice president pleaded guilty Wednesday to a fraud charge, admitting he helped former Olympus Corp. executives carry out a fraud involving several hundred million dollars that deceived investors into thinking the company was firmer financially than it was.
Chan Ming Fon, 50, pleaded guilty in Manhattan to federal conspiracy to commit wire fraud. He said he assisted the executives as they misrepresented the financial condition of the maker of medical devices and cameras from at least 2004 through 2010 while he worked at two international financial institutions.
“I acknowledge that my conduct was wrong,” Chan told U.S. District Judge Laura Taylor Swain.
Chan, a Taiwanese citizen and Singapore resident, was arrested in December in Los Angeles. He was expected to remain in the Los Angeles area after posting $1.5 million cash as part of his $3 million bail.
Prosecutors said Chan managed a fund that held a bond investment portfolio belonging to Olympus. The government said Olympus executives directed Chan to transfer the portfolio to an Olympus-controlled entity, making the company appear stronger financially than it was.
In a plea deal with the government that requires his cooperation, Chan admitted that he provided false and misleading information about the investment portfolio to Olympus’s auditor, misleading investors into thinking the portfolio remained in safe and secure bonds.
Chad received more than $10 million in compensation for cooperating with the corrupt executives.
At the time of his arrest, U.S. Attorney Preet Bharara said Chan “was handsomely paid to play an international shell game with hundreds of millions of dollars of assets in order to allow Olympus to keep a massive accounting fraud going for years, duping its auditors and its shareholders.”
A year ago, Olympus, its former president and two other executives pleaded guilty in Tokyo to criminal charges related to a two-decade $1.7 billion accounting fraud scheme aimed at covering up massive investment losses. Japanese prosecutors said the scheme used overseas bank accounts, shell companies and fraudulent transactions to hide the losses.
A Japanese judge said in July that executives used their authority and financial expertise to carry out a fraud that undermined faith in the Tokyo stock market and shook corporate Japan’s international credibility.