Cleveland, Ohio - Two Chinese nationals have been charged in federal court in Cleveland with defrauding Akron-based Goodyear Tire & Rubber Co. out of $1.5 million (€1.3 million).
Acting US Attorney Carole Rendon for the Northern District of Ohio and Stephen Anthony, special agent in charge of the FBI's Cleveland office, said in a 21 June news release that Xin Franco Fan, 40, and Rex Xu Yu, 41, were employees of a Goodyear subsidiary in Singapore.
The two were charged with fraud “by incorporating overseas shell companies they had a financial interest in and using those companies to sell natural rubber to Goodyear between 2013 and 2016”, said the release.
“These two defendants stole $1.5 million from Goodyear over several years,” Rendon said in the release. “Goodyear is to be commended for promptly reaching out to law enforcement when they uncovered this scheme. Because of their quick action, these men will pay for their crimes.”
Fan and Yu were employees of Goodyear Orient Co. (Private) Limited of Singapore, or GOCPL. That company manages all of the natural rubber acquisition for Goodyear’s global operations. Fan was Yu’s manager.
Goodyear, through GOCPL, spends approximately $1 billion annually to acquire natural rubber for its operations, the release stated.
In 2015, Goodyear received an anonymous tip that Fan and Yu were receiving kickback payments in connection with GOCPL’s raw materials purchases. Goodyear would purchase natural rubber from the shell companies.
Fan and Yu also required Goodyear suppliers to use loading companies in which they had a financial interest, according to the release.
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