Alleged Chinese spies indicted in Taiwan for money laundering

Taipei-Two executives from a Hong Kong company, who have been prevented from leaving Taiwan since they were accused in 2019 of conspiring with Chinese intelligence, were indicted on charges of money laundering Thursday by the Taipei District Prosecutors Office.

China Innovation Investment Ltd. CEO Xiang Xin (??) and his wife, alternate board member Kung Ching (??), were originally arrested by Investigation Bureau agents at Taoyuan International Airport on Nov. 24, 2019.

Their arrests came after Wang William Liqiang (???), a self-proclaimed Chinese spy seeking asylum in Australia, said the company, at which he was formerly employed, was a front for efforts by Chinese intelligence to target the democracy movement in Hong Kong and elections in Taiwan.

Although Xiang and Kung were released days after their arrest, they have since been barred from leaving Taiwan pending further investigation into the allegations.

On Thursday, the Taipei District Prosecutors Office filed its first charges against the pair, for money laundering, while indicating that they remain under investigation for violations of Taiwan's National Security Act.

According to the indictment, Xiang previously held positions at several Chinese state entities, including the Commission for Science, Technology and Industry for National Defense (COSTIND), and served as the chief executive of China Innovation Investment and another company, China Trends Holdings Ltd., after obtaining a Hong Kong passport in 1993.

Kung, meanwhile, formerly worked as an art editor at a military affairs magazine under the COSTIND, the indictment said. In 2016, prosecutors said, a Shanghai-based wealth management company, Guotai Investment Holding (Group) Co. Ltd., paid Xiang HKD$60 million (US$7.71 million) to support its purchase of ownership stakes in the two Hong Kong-listed companies he headed, as part of an attempted reverse merger.

Guotai ultimately purchased HKD$203 million in shares in the two companies, which it planned to turn into subsidiaries and use to launder funds from a massive investment fraud it had carried out in China.

Later that year, however, Guotai was placed under investigation by Chinese authorities, ultimately leading to the sentencing of its founder to life in prison in 2018.

In the course of the investigation into Guotai, the indictment said, Chinese police interviewed Xiang in Hong Kong on Aug. 9, 2016. Ten days later, Xiang and Kung traveled to Taiwan, where they each opened personal bank accounts.

After returning to Hong Kong, Xiang and Kung transferred HKD$203 million from company accounts into joint accounts they had at two banks in the territory, prosecutors allege.

Then, in late 2016, they began making frequent trips to Taiwan, where they purchased a luxury apartment for NT$90 million (US$3.17 million) in Taipei's Xinyi District in December and two adjoining properties in the same building for NT$200 million the following February, the indictment said.

Around that time, the couple also transferred about NT$300 million in funds from Hong Kong to Taiwan to cover the cost of their real estate acquisitions, tax payments and home decoration expenses, according to prosecutors.

Prosecutors indicted Xiang and Kung under the Money Laundering Control Act, on the basis that their money transfers and real estate purchases in Taiwan were an attempt to conceal funds that they knew Guotai had illegally obtained through fraud.

As a result, prosecutors said, they had seized the real estate properties owned by the couple and asked Taipei District Court to declare them legally confiscated.

The decision to file the charges on Wednesday, while the investigation into the national security related allegations continues, was made because a legal order preventing the couple from leaving the country was due to expire on April 12, the prosecutors office said.

Source: Focus Taiwan News Channel