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Two plead to bribing foreign officials

Department of Justice

U.S. Attorney’s Office

Southern District of New York


FOR IMMEDIATE RELEASE

Thursday, December 1, 2022

Two Defendants Plead Guilty To Conspiring To Bribe High-Level Officials Of The Republic Of The Marshall Islands

Damian Williams, the United States Attorney for the Southern District of New York, announced today that CARY YAN, a/k/a “Hong Hui Yan,” a/k/a “Chen Hong,” and GINA ZHOU, a/k/a “Chaoting Zhou,” a/k/a “Angel Zhou,” pled guilty to conspiring to violate the Foreign Corrupt Practices Act (“FCPA”) in connection with a multi-year scheme to bribe government officials in the Republic of the Marshall Islands (the “RMI”) to pass legislation that would benefit the business interests of YAN, ZHOU, and their associates.  In November 2020, Thai authorities arrested YAN and ZHOU in Thailand at the request of the United States pursuant to the U.S.-Thailand extradition treaty, and following court proceedings, the Thai government extradited YAN and ZHOU to the United States on September 2, 2022.  Both defendants pled guilty today before District Judge Naomi Reice Buchwald.

U.S. Attorney Damian Williams said: “As they have now admitted, the defendants sought to undermine the democratic processes of the Republic of the Marshall Islands through bribery in order to advance their own financial interests.  I commend the career prosecutors of this Office and our law enforcement partners for bringing this corruption to light and ensuring that justice is done.”

According to the Indictment filed in the case and publicly available information:

Beginning at least in 2016, YAN and ZHOU began communicating and meeting with RMI officials in both New York City and the RMI concerning the development of a semi-autonomous region within a part of the RMI known as the Rongelap Atoll.  The creation of the proposed semi-autonomous region was intended by YAN, ZHOU, and those associated with them to obtain business by, among other things, allowing YAN and ZHOU to attract investors to participate in economic and social development projects that YAN, ZHOU, and others promised would occur in the semi-autonomous region.

As proposed by YAN and ZHOU, the so-called Rongelap Atoll Special Administrative Region (the “RASAR”) would be created by legislation (the “RASAR Bill”) that, if enacted by the RMI legislature, would significantly change the laws on the Rongelap Atoll to attract foreign businesses and investors, such as by lowering or eliminating taxation and relaxing immigration regulations.  In or about mid-August 2018, certain RMI legislators officially introduced the RASAR Bill.  Starting before that date, and continuing until at least on or about November 1, 2018, YAN and ZHOU offered and provided a series of cash bribes and other incentives to obtain the support of RMI legislators for the RASAR Bill.

On or about November 18, 2019, the RMI held elections for the legislature.  As a result of these elections, on or about January 13, 2020, the then-President of the RMI left office.  Shortly thereafter, YAN and ZHOU began emailing and meeting with certain RMI officials to continue their plan to create the RASAR.  In or about late February 2020, the RMI legislature began considering a resolution that would endorse the concept of the RASAR (the “RASAR Resolution”), a preliminary step that would allow the RMI legislature to enact the more detailed RASAR Bill at a later date. 

On or about March 7, 2020, YAN and ZHOU met with a close relative of a member of the RMI legislature in the RMI.  During the meeting, YAN and ZHOU gave the relative $7,000 in cash to pass on to the official, specifying that this money would be used to induce and influence other RMI legislators to support the RASAR Resolution.  YAN and ZHOU further stated, in sum, that they knew that the official needed more than $7,000 for this purpose and that YAN and ZHOU would soon obtain additional cash for the official.  YAN and ZHOU also discussed having previously brought larger sums of cash into the RMI through the United States and that they planned to do so again in the future.  On or about March 20, 2020, the RMI legislature passed the RASAR Resolution with the support of legislators to whom ZHOU and YAN had provided bribes and other incentives.

*                *                *

YAN, 51, and ZHOU, 35, both of whom have traveled on passports issued by the RMI, pled guilty to one count of conspiring to violate the FCPA, which carries a maximum sentence of five years in prison.    

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. 

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Williams additionally thanked the Royal Thai Government, the U.S. Department of State’s Diplomatic Security Service, the Embassy of the United States in Bangkok, and the Justice Department’s Office of International Affairs for their assistance in securing the arrest and extradition of the defendants.  

The case is being prosecuted by the Office’s Public Corruption Unit and the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Hagan Scotten, Lara Pomerantz, and Derek Wikstrom are in charge of the prosecution. Trial Attorneys Gerald Moody and Anthony Scarpelli were also assigned to the prosecution.

U.S. Department of Justice Press Release

Link:

DOJ Press Release

Categories: Anti-Corruption Bribery Department of Justice (DOJ) Updates Enforcement Actions Pleas and Verdicts

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