Prosecutors on Friday indicted former Mega Financial Holdings Chairman Mckinney Tsai (蔡友才) on charges of forgery, insider trading and money laundering and recommended a 12-year prison sentence.
Also indicted were former Mega Financial chief secretary Wang Chi-pang (王起梆) and Huang Shih-ming (黃士明), general manager of Mega International Commercial Bank’s New York branch.
Tsai came under investigation by prosecutors after Mega Bank’s New York branch was fined US$180 million by the New York State Department of Financial Services (DFS) on August 19 for violating the state’s anti-money laundering laws.
The violations were uncovered by the DFS during an examination conducted between January and March 2015.
An investigation by prosecutors found that Tsai did not call a board meeting to report the situation to board directors after receiving the DFS examination report in February this year.
On March 24, however, Mega Financial sent a response to the DFS bearing Tsai’s signature, stating that “The Board of Directors … understand the seriousness of the issues,” according to the indictment issued by the Taipei District Prosecutors Office.
Tsai resigned from the chairman post shortly after that, citing health reasons.
In anticipation of a plunge in Mega Financial’s share price, Tsai, Wang and Huang sold their shares in the company before the DFS announced its penalty on Aug. 19 and made gains of NT$568,876, NT$1.36 million and NT$206,360, respectively, from their trades, prosecutors said.
Prosecutors also found that during his tenure as Mega Financial chairman, Tsai solicited investment from the company’s loan clients for a private equity fund he established, and he collected NT$225 million, or 1.5 percent of the total amount invested, as “annual administration service fee.”
Tsai’s illicit gains totaled NT$180 million after taxes, prosecutors said.
Between May 12 and Aug. 17, Tsai remitted the NT$180 million to Ta Chong Bank accounts opened in Hong Kong by several overseas companies he established, before transferring the money to other overseas accounts, in an attempt to launder the illicit gains, prosecutors said.
Source: Focus Taiwan News Channel