Former Singapore banker arrested in US over Olympus fraud

Former Singapore banker arrested in US over Olympus fraud

A former Singapore banker was arrested in Los Angeles on Thursday and accused of helping "liquidate" hundreds of millions of dollars in an accounting fraud at Olympus Corp (7733.T), one of the biggest corporate scandals in Japan's history.

Chan Ming Fon, a one-time bank vice president, is the latest former executive and the first from outside of Japan to become ensnared in the $1.7 billion (S$2 billion) accounting cover-up at the camera and medical equipment maker.

The company has admitted it used improper accounting to conceal massive investment losses under a scheme that began in the 1990s.

Court papers in the United States said Chan was paid $10 million by Olympus or entities controlled by Olympus for his role in the fraud. The case against Chan was filed in a federal court in New York.

"The defendant had a direct role in the secret liquidation of hundreds of millions of dollars of Olympus investments. He then waged a six-year campaign to conceal that misdeed by lying, certifying to auditors that the investments still existed years after liquidation," said FBI Assistant Director-in-Charge George Venizelos.

Olympus declined to comment.

Chan's arrest comes after three former Olympus executives pleaded guilty in September to charges related to the fraud.

Chan, a Taiwan national, was interviewed by the Federal Bureau of Investigations this week, US authorities said. He is being held in custody ahead of a scheduled appearance in a federal court in Los Angeles on Friday.

The former banker at Commerzbank (CBKG.DE) and Societe Generale (SOGN.PA) in Singapore is charged with one count of conspiracy to commit wire fraud, which carries a maximum penalty of 20 years.

Commerzbank and Societe Generale could not be reached for comment.

Chan, 50, is currently listed as a director of three Singapore companies, GIT Capital, GIT Consulting and SJ New Energy.

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