2 Execs of Failed Chinatown Bank Convicted in $15 Million Scam
NEW YORK (AP) _ Two former top officials of the defunct Golden Pacific Bank were convicted Wednesday of federal conspiracy and fraud charges for the secret diversion of $15 million in depositors’ money.
Former chairman Kuang Hsung Joseph Chuang and Theresa Shieh, the bank’s former vice president, were each convicted of the scheme, which federal officials said led to Golden Pacific’s 1985 collapse.
Golden Pacific, once one of the largest banks in Manhattan’s Chinatown, had 21,000 depositors and $160 million on deposit when it was closed by federal bank regulators, causing a near riot among anxious customers.
Chuang, 47, of Staten Island, and Ms. Shieh, 36, of Flushing, Queens, were convicted of defrauding Golden Pacific customers and the government by selling millions of dollars in bogus certificates of deposit, called ″yellow certificates″ because they were printed on yellow paper.
The yellow certificates were not federally-insured, as are real CDs, and the certificates’ sales were kept off the bank’s books and hidden from federal bank regulators.
The money was used to generate a multi-million slush fund under the defendants’ personal control and also to cover up failed loans and other high- risk investments.
The federal Comptroller of the Currency declared Golden Pacific insolvent on June 21, 1985 and the bank was later taken over by Hongkong & Shanghai Banking Corp.
Chuang and Ms. Shieh each face a maximum penalty of more than 100 years in prison when they are sentenced March 17 by U.S. District Judge Miriam Goldman Cedarbaum, said Assistant U.S. Attorney Aaron Marcu.