Alleged smuggling mastermind Lai Changxing arrives at an
immigration court in Vancouver in November.
Lai Changxing
To show they meant business,
the Chinese government sent three agents to escort one of the
suspect's brothers to the meeting
in Vancouver earlier this year.
Lai Changxing, the alleged
mastermind of a multi-billion-dollar smuggling racket in Fujian
province, refused to return
with the agents and his brother. Instead, he applied for refugee status in
Canada with his family.
His brother, who is co-operating with the Chinese government, was sentenced to 15 years in jail this month and still faces the possibility of being executed. Another brother has been jailed for seven years. So far 14 people have been executed in connection with the case.
The meeting with the secret service agents was arranged after negotiations between Ottawa and Beijing -- both of which were aware that Lai had been living in a million-dollar mansion on West 57th Avenue in Vancouver since August 1999.
"We have been told that getting Lai back to China is the single most important issue between China and Canada right now ... he is Canada's richest refugee claimant," a government source said.
Lai and his wife, Tsang Mingna,
were arrested in front of their three
teenaged children in
Metrotown on Thursday, after Immigration Canada
decided to intervene
in the refugee process and arrest the couple for their
alleged criminal offences
in China.
They are in custody pending an immigration hearing on Tuesday.
Lai is accused of
running a massive smuggling empire based in the port of
Xiamen, capital of Fujian.
Investigations and secret trials in China have
already ensnared dozens
of high government officials.
His company, Yuanhua,
which means Fair Well, was said to be a front for
smuggling into China
everything from cigarettes and guns to cars and oil
without paying duties.
Estimates of the total value of the illegal imports
range from $6.4 billion
US to almost $10 billion US.
Alastair Boulton,
Lai's Vancouver lawyer, confirmed that three Chinese
agents brought the suspect's
brother to meet Lai in Vancouver.
"The deal (offers
made by the agents) was suspect and unbelievable," he
said.
"I don't know why
Immigration Canada had to arrest Lai and his wife in
front of their children
... they knew he has been here since August 1999."
Boulton said Lai filed
a refugee claim in June saying he will not get a fair
trial and is likely
to be executed if sent back to China.
Immigration Canada confirmed the arrest and refused comment.
Lai and his family
allegedly entered Canada more than a year ago using
fake passports that
he bought from a high-ranking Fujian police officer.
He is said to have
quickly connected with the Chinese underworld in B.C.
and is believed to be
linked to loan sharking and extortion in Lower
Mainland casinos.
An Ottawa source claimed
Lai is banned from all B.C. casinos until Feb
10, 2002 on suspicion
of loan sharking.
The source also said Lai is a "VIP guest" at the Niagara casino in Ontario.
He reportedly has
gambled close to $3 million at the casino which he has
visited more than 30
times.
Last January, Vancouver
police investigating an extortion racket picked up
Lai and a woman. She
was charged, Lai was not.
Lai, 46, who was an
illiterate peasant when he started trading in imported
goods in the 1980s,
used his access to once hard-to-get luxuries to corrupt
government, police and
military officials, China alleges.
He moved to Hong Kong
a few years ago, bought Xiamen's soccer team,
built a 30-storey hotel,
a replica of the Forbidden City as a tourist
attraction and was planning
an 88-storey hotel and office complex before
Yuan Hua's operations
were disrupted by a government-ordered
crackdown.
Realizing that connections
were crucial to his business, Lai hired children of
high officials in customs,
the prosecutors' office, police and border patrols.
Famous for his generosity,
Lai maintained a seven-storey guesthouse in
Xiamen known as the
Small Red Mansion, where he wined and dined
officials.
In 1996, two years
after he set up Yuan Hua, he started construction of
the 88-storey Yuan Hua
International Centre in Xiamen.
He invited 2,000 guests
from Fujian and Beijing to the ground-breaking
ceremony. Each was said
to have received money and gifts worth 3,000
yuan (C$560). Hidden
cameras filmed his guests romping with hostesses,
giving him valuable
ammunition, Chinese state media reported.
At a meeting with
Chinese Premier Zhu Rongji before he moved to B.C,
Lai reportedly offered
to pay Beijing US$2 billion to call off China's legal
hounds.
But Zhu responded
by sending hundreds of investigators into Fujian. More
than 200 officials,
including Xiamen's chief of police and the head of
customs, were arrested.
A series of secret
trials began in Fujian in September 1999, resulting in the
convictions of 84 people.
Fourteen of them, including police and
government officials,
were sentenced to death.
The scandal has reached
the highest levels of the Communist Party
hierarchy and many Chinese
officials are said to be worried about what Lai
may reveal.
The Yazhou Zhoukan,
a magazine affiliated to the independent Ming Pao
daily newspaper, reported
yesterday that Lai repeatedly telephoned
prosecutors in China
from Canada during the trials to complain the
proceedings were unfair.
Lai has prepared for
his arrest by making copies of important evidence
which he could leak
to the foreign press, reported Yazhou Zhoukan.
"This material is
like a bomb that can destroy the political power of Jiang
Zemin (China's leader),"
said the Yazhou Zhoukan report.
Before his arrest,
Lai had been variously reported fleeing to the Philippines,
Burma and Canada. There
was even a report in Hong Kong last February
that he had been arrested
in Burma.
Immigration department
officials admit they will have a tough time trying to
extradite Lai to China.
Canada does not have
a extradition treaty with China and in cases like this
Ottawa typically seeks
assurances from Beijing that it will not administer
the death penalty if
the suspect is returned.
With the help from the Canadian
government and Interpol, the central figure in China's
biggest corruption scandal
was finally captured. Lai Changxing, who had been on the run
for more than a year,
was detained in the Vancouver area last week by the Royal Canadian
Mounted Police on immigration
warrants, said Canadian government officials in
Vancouver and Beijing.
Lai's Yuanhua Group,
based in the busy southeastern port of Xiamen, operated a massive
scheme that smuggled
cars, oil, cigarettes, and other goods worth $6.4 billion into China
and cost the Chinese
treasury another $3.6 billion in lost import duties, according to
government prosecutors.
Chinese authorities have
accused Lai of spending lavishly to buy official protection in a
web of corruption that
reached the top of the ruling Communist Party. Such was Lai's
infamy that the wholly
state-controlled media referred to this worst corruption scandal of
the communist era as
the "Lai Changxing smuggling group case." The smuggling
activities of Lai were
on such a scale that they had hurt the financial well-being of China,
Jim Murray, a Canadian
lawyer representing the Chinese government, told a court
hearing in Vancouver
Tuesday.
Billed as China's most wanted
man, Chinese foreign ministry spokesman Zhu Bangzao
said earlier last month that
Lai would be brought to justice no matter where he was hiding.
"He would not escape punishment
wherever he was in the world," said Zhu.
China knew Lai ,46, was in
Canada as long ago as August last year, the Canadian press
claimed this week. Beijing
even sent secret agents to Canada this year to warn the
alleged mastermind behind China's
biggest smuggling racket that his brothers might be
illed if he did not return
home.
The claims that Beijing had
sent agents to meet Lai in Vancouver were made in the
Province newspaper Tuesday.
"To show they meant business, the Chinese Government
sent three agents to escort
one of the suspect's brothers to the meeting in Vancouver
earlier this year," the paper
said.
But Lai was said to have refused
to return with the agents. Instead, he applied for refugee
status in Canada with his family.
The paper said the meeting
with the secret service agents was arranged after negotiations
between Ottawa and Beijing,
both of whom were aware that Lai had been living in a
luxurious home in Vancouver
since August last year.
Lai's lawyer, Alastair Boulton,
confirmed to the paper details of the meeting between his
client and the three agents.
"The deal [offered by the agents] was suspect and
unbelievable," he said.
Lai has every reason not to
want to be sent back to China.
Lai and his family allegedly
entered Canada using fake passports he bought from a
high-ranking Fujian police
officer. Boulton said Lai filed a refugee claim in June, saying he
would not get a fair trial
and was likely to be executed if sent back to China.
Mainland sources said it was
unlikely Lai would be spared given the publicity surrounding
the case - particularly now
that it had come to symbolize Beijing's fight against corruption.
"Given that the Yuanhua case
is so high-profile and the amount of bribes involved is so
large, it is unlikely Lai could
escape death," a legal source familiar with corruption cases
in China said.
There were only two possibilities
allowing key figures such as Lai to live. "Either that
person surrenders, or his confession
leads to important discoveries in the case . . . [the
discoveries] have to lead to
arrests of important people." The source said Lai could be
extradited from Canada to China
through Interpol, and transit through Hong Kong was
not necessary.
When courts in Fujian sentenced
key members of the Yuan Hua case early last month,
Lai's two brothers - Lai Shuiqiang
and Lai Changtu - were spared the death penalty.
However, 11 officials and smugglers
were sentenced to death despite some playing a
lesser role in the scandal.
A court announcement carried by Xinhua said Lai's brothers
were sentenced to seven and
15 years' jail because they surrendered. Earlier reports said
the brothers had played an
instrumental role in helping the authorities track down Lai.
Alleged smuggling mastermind Lai Changxing arrives at an
immigration court in Vancouver in November.
Another source familiar
with the Yuan Hua case said yesterday the scale of Lai's alleged
crimes ensured he would
be executed if returned. "There are questions in people's minds
about why Lai's brothers
were given such light sentences when others had to die for
accepting tens of thousands
of yuan. Just in terms of the amount of goods smuggled by the
group, Lai has to die
for sure," he said.
Lai best hope now is
to seek refugee status in Canada.
However, although he
and his wife were detained for violating immigration laws, it became
clear during the court
hearing that the Government wants to deport them to China in
connection with allegations
of smuggling and other crimes. "Canada is not a safe haven for
criminals. They're trying
to hide behind their refugee claims in Canada," government
lawyer Murray Wilkinson
told the court.
After a six-hour hearing
Tuesday, Canadian immigration judge Otto Nuppeon ordered Lai
and his wife, Tsang Mingna,
to remain in jail because there is a risk that they might flee
during the immigration
hearing process.
Described by his friends
as "flamboyant and flashy," Lai could not seem to be able to
change his behavior while
on the run. In fact, his high-rolling lifestyle gave him away and
eventually led to his
capture.
The Province newspaper
said Lai was a VIP guest at the Niagara casino in Ontario, which
he reportedly had visited
more than 30 times and gambled close to US$2.2 million.
He is alleged to have
quickly hooked up with the Chinese underworld in Vancouver and is
believed to be linked
to loan-sharking and extortion in casinos.
An Ottawa source was
quoted in the paper as saying that Lai had been banned from all
casinos until February
10 on suspicion of loan-sharking.
Vancouver police investigating
an extortion racket arrested Lai and a woman in January
but only the woman was
charged. By then, the Royal Canadian Mounted Police has placed
him under daily surveillance
and kept detailed knowledge of his movements.
Police sources said Lai
kept his funds topped up by paying $7,000 each to Chinese
accomplices to return
to China to help arrange for his assets in Fujian to be transferred to
Canada.
He was said to have owned
luxury properties in Vancouver, including a house worth
$900,000 that was sold
for $683,000 this month.
He also has spent $112
million on properties in Hong Kong, including offices.
While still in China,
Lai was said to have spent tens of thousands of yuan on
entertainment, and his
mistress was a well-known singer.
He bought Xiamen's soccer
team and built a 30-story hotel and a replica of the Forbidden
City as a tourist attraction.
He was planning an 88-story hotel and office complex before
his alleged smuggling
operations faced a crackdown.
Lai invited 2,000 guests
from Fujian and Beijing to a ground-breaking ceremony for the
88-story complex - the
Yuan Hua International Center - in 1996 and each was said to have
received money and gifts
worth 3,000 yuan.
He also maintained
a seven-story guest house in Xiamen, Fujian, the "Small Red
Mansion", where he allegedly
wined and dined officials.
It was perhaps Lai's
"generosity" that saved him from being arrested in China.
Canadian government lawyer
Jim Murray said one of the officials phoned Lai in Xiamen on
August 13 last year and
told him to flee. "The net was closing in on you," Lai was warned.
A day later, Lai and
his wife arrived in Vancouver as visitors with their three children, all
using Hong Kong passports.
It is understood Lai's
family flew from Xiamen to Canada, stopping in Hong Kong only in
transit, leaving immigration
there without a record of their departure.
Murray told the court
that Lai had disclosed the tip-off in papers he filed as part of his
claim for refugee status
in Canada. The alleged official advised him to take flight but to
avoid Asia and suggested
Canada, where he said something could be worked out, the
court heard.
If the Canadian Government
believes the pair do not qualify for asylum and has sought
protection merely to
avoid being sent back to China to face prosecution for non-political
crimes, the couple's
refugee bid will fail, and a removal order will be issued against them
December 6, 2000 - From CNN news online
Web posted at: 3:53 AM EST (0853 GMT)
TORONTO, Canada (AP) -- The suspected
central figure of a huge Chinese smuggling ring
must remain in a Canadian jail until his claim
for asylum gets settled, an immigration
adjudicator has ruled.
Lai Changxing and his wife, Tsang Mingna,
face deportation to China, where Lai would
likely be executed, if Canada denies their
refugee claims, their lawyers say.
The case is sensitive in Canada, which
prohibits capital punishment and has tried to
avoid deporting people who face obvious
political persecution or a death sentence in their
homeland.
In the case of Lai, accused of heading a multibillion-dollar smuggling ring
in
China, lawyers for Canada's immigration department say the alleged crimes
are
non-political and Lai should be deported.
The government lawyers also argued against granting bail to Lai and his
wife,
saying they have more than $1.5 million to spend on fleeing the country
if they
faced getting sent back to China.
Immigration and Refugee Board adjudicator Daphne Shaw-Dyck agreed on
Tuesday, ordering the couple to remain in custody. Lai and his wife did
not
attend Tuesday's session.
Chinese prosecutors accuse Lai of running a ring
that smuggled $6.4 billion in cars, oil, cigarettes
and other products through the port of Xiamen in
China's Fujian province, avoiding $3.6 billion in
import taxes. Authorities also accuse Lai of buying official protection
in a
corruption scheme that reached the top of the ruling communist party.
China has convicted 84 people in connection with the smuggling ring. Eleven
have been sentenced to death, including police and government officials.
Another detention hearing was scheduled for December 21 for the couple,
who
were arrested November 23 for allegedly giving false or incomplete information
when they first entered Canada in August 1999.
One of their lawyers, Alastair Boulton, said Tuesday he would apply to the
Federal Court of Canada to speed up the process.
"We're profoundly disappointed" with Tuesday's ruling, Boulton said, adding
that
Lai and Tsang feared their deportation to China was imminent due to collusion
between the Canadian and Chinese governments.
Lai's lawyer, Darryl Larson, said last week the charges against Lai amounted
to
failure to pay taxes, and the death penalty would be excessive. Larson said
he
believed Lai's arrest was part of a deal between Canada and China that included
China's willingness to accept back hundreds of illegal immigrants who fled
to
Canada last year.
"He's being used because it's convenient," Larson said of Lai.
Lai is seeking refugee status, similar to asylum in the United States.
Prime Minister Jean Chretien likely would come under pressure from China
to
send Lai back if the case remains unresolved by February, when Chretien
will
lead a trade mission to China. However, any decision to return Lai could
be
unpopular with human rights groups in Canada.
During two detention hearings so far since the arrests of Lai and Tsang,
immigration ministry lawyers have described Lai as a high-stakes gambler
who
lost more than $333,000 at the Niagara Falls casino where he was taken into
custody. They also said he had links to organized crime groups in Canada,
and
used false documentation to flee Hong Kong when Chinese police were closing
in
on him in August 1999.
Lai allegedly failed to mention he was wanted in China when he entered Canada,
the government lawyers said, an immigration violation that can get him kicked
out of the country.
In an editorial, the China Daily decried pervasive corruption
and applauded the court-ordered executions of two
bribe-taking officials: legislative Vice Chairman Cheng Kejie
and Hu Changqing, deputy governor of Jiangxi province.
``A heavier haul is expected from the Xiamen case,'' the
English-language newspaper said, referring to the port city at
the heart of the corruption scandal.
Trials began Sept. 13 in Xiamen and four other cities in southeastern
Fujian province. Several courts were needed to try the large number of
defendants.
Although the communist government and the media it controls have
disclosed few details about the case, two Beijing-backed Hong Kong
newspapers reported this week that more than 90 officials were on trial
in
26 cases related to the sprawling scandal.
A court official in Xiamen said that among the defendants put on trial
Wednesday was Lai Changtu, younger brother of the central figure in the
scandal, Lai Changxing. The official refused to give his name or specify
the charges against the younger Lai.
Lai Changxing ran the Yuanhua Group, an ambitious conglomerate that
allegedly smuggled cars, cigarettes, oil and other goods reportedly worth
nearly $10 billion. Lai supposedly spent lavishly to win powerful friends
for protection.
Some powerful figures were tainted in the investigation, causing unease
in
the Communist Party's ruling inner circle. Chinese leaders want to
convince the public they are determined to end corruption, but the rare
and apparently selective prosecutions of high-level officials have increased
public cynicism.
XIAMEN SMUGGLING CASE
The Lust Mansion
Fugitive Lai Changxing cultivated officials by wining and dining
them at his 'underground palace'
By XIE HONG
TO CULTIVATE officials and facilitate his billion-dollar
smuggling racket in China, Chinese fugitive Lai Changxing ran
an 'underground palace' to wine and dine his guests.
Unknown to them, the shrewd businessman used cameras
hidden in the Little Red Mansion - the name of his
seven-storey guesthouse - to film the officials romping and
bathing with hostesses.
Armed with this 'valuable ammunition' and using huge bribes,
he cajoled hundreds of government officials into complicity.
The Little Red Mansion was built in the then remote Huli
industrial estate in Xiamen city, in south-east China's Fujian
province.
A female manager of Lai's company, the Yuanhua Group, said
that although the guesthouse had an ordinary facade, it was
sheer opulence inside, with a full range of amenities including
dance hall, karaoke lounge, movie theatre, sauna and footbath
facilities, five luxurious suites and a large bevy of beautiful
girls.
She reported seeing a local official visiting the guesthouse with
several provincial officials once when she was there to see Lai.
The Chinese fugitive was extremely generous when it came to
giving bribes, reports said.
Each of nearly 2,000 guests at a groundbreaking ceremony of
his 88-storey Yuanhua International Centre received 3,000
yuan (S$630) worth of gifts, including 1,000 yuan hongbao, a
bottle of Martell, and two cartons of cigarettes.
They were also treated to a 'working meal' of sharksfin,
abalone, ginseng and bird's nest.
Lai reportedly spent six million yuan for this event alone.
Apart from giving money and arranging overseas tours, he
would also sponsor the children of officials to study abroad.
Lai, also called 'Fat Lai' because of his physique, made a
name for himself in his hometown Jinjiang in Fujian province
even when he was still a farmer and garbage collector.
He was said to have borrowed 50,000 yuan once from an
official and paid him back with 20-per-cent interest.
Starting his first business in the early 1980s, at a time when
foreign-made goods were still rare in China, he presented
clients with gifts of imported leather briefcases.
He established the Xiamen Yuanhua Electronics Company in
1994 and expanded rapidly into the Yuanhua Group dealing in
property, entertainment and oil trading.
His company's brand name soon became ubiquitous - there
were Yuanhua cigarettes, Yuanhua wine, Yuanhua shopping
city, Yuanhua entertainment city and even a Yuanhua soccer
team. It thus became a symbol of economic development in
Xiamen.
His smuggling racket helped finance the expansion of his
business empire.
Reports put the total value of goods smuggled at between 80
billion yuan and 150 billion yuan.
The record amount involved in the smuggling scandal has
earned Lai a place in the Guangdong Xin Kuai Bao
newspaper's Top 10 Economic Newsmakers of the Year.
The paper, which published the list yesterday, said however
that it hoped there would be no such notorious figure on its list
again next year.
SUMMARY: Lai Changxing, the
suspected mastermind behind a huge smuggling scandal in China,
failed to be released from
custody in Canada where he awaits charges on immigration violations.
Having been arrested two
weeks ago by Canadian authorities, Lai and his wife, Tsang Mingna, will
continue to be detained until
a December 21 deportation hearing. The adjudicator with Canada’s
Immigration and Refugee Board,
Daphne Shaw Dyck, believed the two were likely to flee Canada if
released, but stressed she
was not deciding Lai’s guilt or innocence with her ruling.
Using documents largely supplied
by Chinese investigators, Canadian authorities allege that Lai’s
Yuan Hua Co. maintained a vast
smuggling operation in China, Hong Kong, and had links to Asian
gangs that operate in Canada.
If deported back to China,
Lai would most likely face the death penalty. He has requested refugee
status and argues that the
government is setting him up as a scapegoat.
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