Chinese nationals sent to prison for two years for stealing $1.5 million from Goodyear

Topics:  Goodyear

U.S. Attorney’s Office, Northern District of Ohio
13 October 2016

Two Chinese nationals were each sentenced to more than two years in prison for defrauding Goodyear Tire & Rubber Company out of $1.5 million, said U.S. Attorney Carole S. Rendon and Stephen D. Anthony, Special Agent in Charge of the FBI's Cleveland office.

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.

Fan and Yu will be deported upon their release.

Both men were employees of Goodyear Orient Company (Private) Limited, or GOCPL, a subsidiary of Goodyear, located in Singapore and with offices in China. GOCPL 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. Fan was Yu’s manager, according to court documents.

Fan, Yu and others incorporated or caused to be incorporated overseas shell companies in which they held a financial interest. Fan, Yu and others caused Goodyear to purchase natural rubber from these shell companies. They also required Goodyear suppliers to use loading companies in which they had a financial interest. This took place between 2013 and 2016, according to court documents

“These two defendants deserve their prison sentences after stealing $1.5 million,” Rendon said. “Goodyear is to be commended for promptly reaching out to law enforcement when they uncovered this scheme. Because of the company’s quick action, these men were brought to justice.”

“The FBI is responsible for protecting the public’s interest in American companies by aggressively pursuing and bringing to justice those who unjustly profit from American ingenuity by stealing secrets,” said Stephen D. Anthony, Special Agent in Charge, FBI, Northern District of Ohio.

As a condition of their employment, Fan and Yu 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. With the cooperation of Goodyear executives, an investigation into the matter led to Fan and Yu being arrested earlier this year and criminal charges being filed in federal court.

This case was prosecuted by Assistant U.S. Attorneys Rebecca Lutzko, Henry F. DeBaggis and James Morford following an investigation by the FBI.