March 21, 2008

SAN JOSE MAN ORDERED TO PAY $239,450 IN RESTITUTION FOR CHINESE INHERITANCE SCAM

SAN JOSE – United States Attorney Joseph P. Russoniello announced that Shiu Chau Wang, also known as Alex Wang, was sentenced yesterday and ordered to pay restitution in the amount of $239,450 at the rate of $4,500 per month for his role in a “Chinese Inheritance” Scam. The sentence was imposed by United States District Judge Jeremy Fogel, sitting in San Jose.

Mr. Wang, age 53, pled guilty on September 19, 2007 to one count of money laundering, in violation of 18 U.S.C. § 1957. In pleading guilty, Mr. Wang admitted that in April 2006 he asked a friend for a $600,000 loan, stating that his grandfather in China had left him a $10-12 million inheritance but that Wang needed the money to pay a tax to the U.S. Department of Homeland Security before the inheritance could be released. The friend agreed to lend Wang $370,000, but asked Wang and his wife to post their home as security. Wang agreed, and told his friend that there was sufficient equity in the home to serve as collateral for the loan. On May 2, 2006, Wang and his wife met with the victim and signed a $370,000 promissory note and a deed of trust as security for the loan. However, the day before that meeting, Wang and his wife had closed on a refinancing of their home, as a result of which there was no longer sufficient equity in the home to serve as full collateral for the loan. After obtaining the funds from his friend, Wang sent the money to a bank in Taiwan.

Mr. Wang and his wife, Stella Wang Chu were indicted by a federal Grand Jury on April 4, 2007. They were charged with conspiracy to commit wire fraud, four substantive counts of wire fraud, conspiracy to commit money laundering, and one substantive count of money laundering.

Stella Wang Chu was subsequently placed on pretrial diversion and agreed to be jointly and severally liable with her husband to make full restitution to the victim. To date, Mr. and Mrs. Wang have repaid the victim $130,550. They have been ordered to continue making payments in the amount of $4,500 per month to cover the remaining $239,450.

United States Attorney Joseph P. Russoniello noted that inheritance scams are particular common in the Bay Area and he encourages everyone who receives such a communication to seek appropriate legal or banking counsel before sending the caller any money or providing any bank account information. Persons who have been victimized by this scam are urged to contact their local police department or the FBI.

Jeffrey B. Schenk is the Assistant U.S. Attorney who prosecuted the case with the assistance of Tracey Andersen. The prosecution is the result of a six-month investigation by the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation.

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