By Mata Press Service

The secretive and lavish lifestyle of Las Vegas high rollers is taking centre stage in the trial of two fugitive bankers who allegedly stole over US$400 million in China and stashed chunks of their loot in British Columbia.

Prosecutors allege that the two from the Bank of China — and a third who has been deported back to Beijing in an unprecedented extradition agreement — created a network of phony companies, staged sham marriages and used fraudulent visas to launder the cash in Canada, Hong Kong, Australia, Macau and the United States between 1991 and 2004.

"All of the defendants were high profile gamblers known to many Las Vegas casinos," stated court documents obtained by the Asian Pacific Post.

"They maintained a lavish lifestyle in Las Vegas in that they stayed at the best hotels, had use of casino jets and hotel bills evidenced that they enjoyed US$4,000 meals."

Prosecutors described the three as "high rollers" with daily transactions at Las Vegas casinos in the hundreds of thousands of dollars.

Baccarat was their game of choice and they often would bet between $10,000 and $100,000 a hand.

"In less than two years, they lost US$12 million gambling in Las Vegas," prosecutors alleged.

Executives from Caesars Palace, Treasure Island, the Bellagio, the Venetian and the Rio — all major casino hotels in Las Vegas — are expected to testify at the trial, which is currently scheduled for three months in a Nevada courtroom.

The elaborate scheme to move money out of China by the group of bankers has also been linked to the Macau operations of Asia’s gambling czar, Stanley Ho.

Prosecutors in Hong Kong who are handling the Bank of China scandal say at least US$1.4 million of allegedly embezzled funds by one of those indicted was illegally moved in the form of an STDM cheque.

STDM, or Sociedad de Tourism e Diversoes de Macau, is Ho's multi-billion-dollar gaming flagship operation which operates the casino at the famous Hotel Lisboa.

The former bankers at the heart of the massive fraud, which damaged China’s banking system, were identified as Xu Chaofan, Xu Guojan and Yu Shendong.

Yu agreed to return to China and testify against his alleged co-conspirators after Beijing agreed to waive the death penalty and keep him in jail for no more than 12 years. His wife, who was part of the fraud, and their children have been allowed to stay in the United States.

The other two ex-bankers and their wives have denied the charges, saying they are being made scapegoats in China’s crackdown on corruption.

has learned that the suspects used Richmond, B.C. as a base to stash millions of the stolen loot.

The group bought at least three houses in Richmond while stashing large amounts of cash into accounts at the Royal Bank Canada branch on Ackroyd Road in Richmond and the Vancouver-area branches of the Hong Kong Shanghai Banking Corporation and the Canadian Imperial Bank of Commerce.

American investigators, with help from forensic accountants in Vancouver, have identified the addresses of the properties in Richmond as being located at 6171 Udy Road, 6160 Udy Road and 6620 Mang Road.

In addition, the group also purchased huge amounts of jewellery, expensive watches and gold figurines, all of which have been seized by American authorities.

Painting a picture of the massive fraud, investigators said Xu Chaofan was the mastermind in the racket.

He had worked for over two decades at the bank of China rising to the position of business development chief at a branch in the southern province of Guangdong, where he managed millions of dollars in investments.

He is alleged to have invited Xu and Yu, then mangers in the credit section of the Kaiping sub-branch, to join the scheme.

At any one time during the alleged conspiracy, one of the three acted as a Bank of China branch president directing lower level employees to make fraudulent transfers.

The scheme to defraud the bank was facilitated by the lack of a central networking system to cross-check accounting between branches and sub-branches.

Using their management positions, the trio and their accomplices are alleged to have:

authorized fictitious loans to Chinese factories, which in turn, transferred the monies to shell companies in Hong Kong;

authorized legitimate loans to Chinese factories, which would repay the loans to shell companies set up by the trio;

used bank customer information to speculate in the foreign currency market and later deposit the commissions into their own accounts.

Proceeds of the fraud were used to fund vacations, seed real estate investments and gamble.

It is not clear where all of the money went but some has been funneled into the personal accounts of relatives, including, in one case, US $6.6 million to the girlfriend of Xu Chaofan's brother-in-law.

In October 2001, the bank discovered during an on-site audit in the Kaiping branch that US$400 was missing.

But the bankers had prepared for the inevitable day of discovery.

Under the direction of the bankers, their wives entered into marriages with naturalized American citizens. The wives had become American citizens by virtue of the marriages. They then deserted their partners and returned to their husbands with American papers.

In October 2001, after being tipped off that the theft had been discovered, the trio of bankers transferred large amounts of cash from their Hong Kong shell companies and banks and fled to British Columbia.

They entered Vancouver using false identities and at one time the three were tracked by Asian Organised Crime investigators to a house in Richmond, which was used as a marijuana grow operation.

The fugitive bankers also crossed the U.S.-Canada border with relative ease.

Yu Shendong was returned to China after pleading guilty to racketeering charges in 2004. He and his wife have provided over 30 hours of testimony to help convict the other two.

Xu Chaofan, who allegedly hatched the scheme, was arrested on October 6, 2004 at an Oklahoma strip mall, where he was working as a cook in a Chinese restaurant while his wife Kuang Wan Fung was waiting tables.

Xu Guojun and his wife, Yu Ying Yi, were arrested in Wichita, Kansas on Sept 22, 2004.

The trial of the high rolling fugitive bankers is expected to cost between US$2 and US$5 million.

As the trial continues in Nevada, another three Bank of China fugitives have made their way to Vancouver, B.C.

Gao Shan, who lives with his family in North Vancouver, is alleged to have embezzled US$150 million from a Bank of China's small branch in Heilongjiang, where he was the branch manager.

He is fighting extradition claiming he has nothing to do with the missing money.

His alleged accomplices Li Dongzhe and Li Donghue are also in Vancouver.