Article: China Resident Indicted For Laundering Millions Of Fraud Proceeds Through Big Island Properties

Article - Media

China Resident Indicted For Laundering Millions Of Fraud Proceeds Through Big Island Properties

Department of Justice, 14 June 2021

HONOLULU – A federal grand jury returned an indictment on June 10, 2021, charging Yao Zhungjun, 50, of Beijing, China, a former project manager at J.R. Simplot Company, an entity operating out of China, which had acquired the Jacklin Seed Company, a producer and marketer of grass seed and turfgrass based in Liberty Lake, Washington, with conspiracy to commit money laundering as part of multiple schemes to defraud Simplot, and route the proceeds through real estate developments in Hawaii.

Judith A. Philips, Acting U.S. Attorney for the District of Hawaii, said that according to the indictment, Yao solicited grass seed orders at artificially inflated prices from Chinese customers and then negotiated kickback payments from those customers in exchange for rebate payments from Simplot. Christopher Claypool, Jacklin’s general manager, approved and Yao collected millions of dollars in kickbacks from just one Chinese grass seed distributor, Beijing Oasis, on more than $10 million in rebates Simplot paid to Beijing Oasis.

The indictment also alleges that Yao and Claypool conspired to defraud Simplot directly. Specifically, Claypool arranged for seller commissions purportedly owed to a European partner to be paid to Yao through a Citibank Hong Kong account in Yao’s wife’s name. Claypool directed the payment of more than $7.3 million in fraudulent commissions to this account from 2008 through 2014.

As part of the money laundering conspiracy for which Yao was indicted, he and Claypool then routed the proceeds of these schemes through at least six pieces of real estate on the Island of Hawaii. From not later than March 2010 and continuing through June 2016, Yao caused more than 55 wires, totaling more than $11.6 million, to be sent from accounts he controlled in Hong Kong to accounts at First Hawaiian Bank for use in the acquisition and development of six parcels under Claypool’s control. From 2010 through October 2018, Claypool developed and then sold those properties for more than $11.4 million and later transferred the proceeds to investments accounts at brokerage firm Edward Jones.

Read Full Article