Chinese nationals jailed for $1.5m Goodyear fraud

Akron, Ohio - Two Chinese nationals were each  sentenced to more than two years in prison for defrauding Goodyear Tire & Rubber Co. out of $1.5 million, according to a report by the US Department of Justice on 13 Oct.

Xin Franco Fan and Rex Xu Yu both pleaded guilty earlier this year to conspiracy to commit wire fraud and honest services wire fraud. Both were sentenced to 27 months in prison and ordered to pay $1.5 million in restitution.

The two men were employees of Goodyear Orient Co. Ltd (GOCPL), a subsidiary of Goodyear in Singapore and with offices in China, which manages all of the natural rubber purchasing, delivery, financing and quality certifications for Goodyear’s global operations.

Goodyear, through GOCPL, spends approximately $1 billion annually to acquire natural rubber for its operations.

According to the report, the two men caused Goodyear to purchase natural rubber from shell companies in which they had an interest.

Between 2013 and 2016, the pair also required Goodyear suppliers to use loading companies in which they had a financial interest.

Fan and Yu will be deported upon their release.

As a condition of their employment, they were obligated to act in the best interests of Goodyear when purchasing natural rubber.

In 2015, Goodyear received an anonymous tip that Fan and Yu were receiving kickback payments in connection with GOCPL’s raw materials purchases.