Wu XIaohui (吴小晖), the former head of insurance giant Anbang Insurance Group, has received an18 year prison sentence for fraud.
On 10 May the Shanghai First Intermediate People’s Court sentenced Wu to a 15 year prison sentence for financial fraud, as well as deprivation of political rights for a four year period and the confiscation of 9.5 billion yuan in assets.
For the crime of professional misconduct the court sentenced Wu to a 10 year prison sentence and the confiscation of 1 billion yuan in assets, with final ruling imposing a total prison sentence of 18 years as well as the confiscation of 10.5 billion yuan in assets.
According to China Central Television an official investigation established that Wu concealed equity relationships and used his personal control of multiple companies to seize control of Anbang Insurance Group, subsequently serving as chairman and general manager.
Starting in January 2011 Wu began to use Anbang’s subsidiaries as “financing platforms,” ordering staff to use false information to obtain approvals from the China Insurance Regulatory Commission (CIRC) as well as continue the sale of investment-style insurance products.
During the period from July 2011 to January 2017, Wu is alleged to have ordered staff to fabricate financial statements and disclose false information, as well as falsify capital increases and repayment capability, in order to “defraud regulators and the general public.”
Wu illegally amassed huge sums by selling investment-style insurance products to the general public beyond the scope approved by CIRC, and offering returns higher than the rates for bank deposits of commensurate maturities, as well as committing to guaranteed returns.
According to the official investigation Wu transferred these proceeds to over one hundred companies that he personally controlled, to be used for the repayment of corporate debts, investment in operations, and capital increases for the Anbang Group, involving a total sum of over 65.2 billion yuan.
In addition to this, the court also determined that Wu used his professional position to illegally appropriate 10 billion yuan in funds from the insurance company.