2ND-PHASE LAFAYETTE SCANDAL PROBE ENDS; 8 SUSPECTS INDICTED
ROC Central News Agency
2006-09-28 22:51:14
Taipei, Sept. 28 (CNA) A special judicial panel investigating a wide-reaching scandal in connection with Taiwan's procurement of six Lafayette-class frigates from France in 1991 concluded its second phase of a probe Thursday, with eight key suspects indicted on charges of graft.
Andrew Wang, the Taiwan agent of French arms supplier Thompson-CSF -- now known as Thales -- and his whole family, including his wife Yeh Hsiu-chen and their four children, were indicted on charges of gaining illegal commissions from the Lafayette deal.
Also prosecuted in the case were Kuo Li-heng, a former naval captain who has been imprisoned for years for involvement in another corruption case, and his brother Kuo Wen-tien.
Prosecutors said in the indictment that the Wangs had opened more than 60 bank accounts in Europe and Asia to launder US$520 million in illegal kickbacks from the Lafayette deal.
As the huge Lafayette slush fund had been laundered in over 10 countries, prosecutors said they would not rule out the possibility that an even bigger sum of illegal kickbacks remains unexposed.
In view of the severity of his crime and the damage to the national treasury, the indictment recommended life imprisonment for Wang, who fled Taiwan following the death of naval Captain Yin Ching-feng, who died under suspicious circumstances in late 1993. Yin is believed to have been poised to blow the whistle on colleagues who had allegedly taken illegal kickbacks from the Lafayette deal. Wang has been wanted on a murder charge since September 2000.
Despite rampant speculation about possible involvement of senior officials of the former Kuomintang (KMT) government in the Lafayette scandal, none of the prominent former officials, such as former President Lee Teng-hui and former Chief of the General Staff Hau Pei-tsun, were indicted.
According to the indictment, Wang and his wife set up a company in 1989 that provided information about Taiwan's warship procurement plan and relevant services for Thomson-CSF in exchange for kickbacks from the Lafayette deal.
Wang and members of his family then opened two "paper companies" overseas to receive illegal kickbacks amounting to US$520 million in total, the indictment said.
To cover up his illegal activity, the indictment went on, Wang opened more than 60 bank accounts with Swiss banks to launder the money. He also remitted US$17.59 million to Kuo Li-heng's bank account in Switzerland.
With bank files provided by the Swiss authorities under a judicial aid agreement, prosecutors managed to piece together the Wangs' criminal activities, including the amount and the allocation of the illegal kickbacks.
In addition to recommending a life sentence for Wang, prosecutors recommend a 16-year prison term for Wang's wife, a 14-year term for their eldest son Wang Chia-hsing and an 11-year term for each of their remaining three children. All of the six defendants are at large, hiding in Europe.
The two Kuo brothers have confessed and have agreed to return all illegal kickbacks and interest back to the national coffers. Prosecutors recommended a 20-year prison term for Kuo Li-heng and a three-year-and-six-month term for Kuo Wen-tien. A total of US$633.26 million has been frozen in 33 Swiss bank accounts under the Wangs' and Kuos' names, according to the investigation panel.
State Public Prosecutor-General Wu Ying-chao has filed a lawsuit with the Swiss judicial authority on behalf of the Republic of China government for the return of the money.
The special investigation panel under the Supreme Prosecutor's Office was formed in August 2000 shortly after the inauguration of the Democratic Progressive Party administration to investigate the two high-profile cases tied to the Lafayette deal -- the "mysterious" death of Ying and the suspected illegal kickbacks.
After 11 months of grueling work, the panel wrapped up its first phase of investigation in July 2001, with the indictment of several retired navy admirals and middle-ranking officers on charges of corruption. All those cases are still in judicial proceeding.
The second phase of the investigation was stalled for a long period due to difficulties in gaining access to the key suspects' overseas bank files. The probe made a breakthrough after Taiwan and Switzerland signed a judicial aid pact. The panel finally gained access to the Swiss bank files in late 2005 after then-Premier Frank Hsieh signed a promissory letter assuring that Wang will not be given the death sentence.
(By Sofia Wu)
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