Defendants released on bond in Goodyear fraud case

YOUNGSTOWN

A U.S. magistrate here has released two Chinese nationals charged with defrauding the Akron-based Goodyear Tire and Rubber Co. on bond.

U.S. Magistrate George J. Limbert released Xin Franco Fan, 40, and Rex Xu Yu, 41, who were arrested Feb. 19 in Akron and charged with wire fraud and honest services wire fraud.

The offenses allegedly occurred in Summit County and elsewhere.

Fan was released on a $50,000 cash bond and Yu on a $50,000 unsecured bond after Robert E. Bulford Jr., an Akron-based assistant U.S. Attorney, withdrew his motion for detention of the defendants.

Both defendants surrendered their passports and must submit to house arrest, and both were ordered to have no contact with any Goodyear employees, suppliers or contractors.

During a Thursday federal court hearing, the magistrate appointed a Mandarin Chinese interpreter for Yu.

Fan is managing director and Yu is sourcing director of Goodyear Orient Co. Ltd., a Goodyear subsidiary located in Singapore with offices in China.

That subsidiary manages all natural rubber purchasing, delivery, financing and quality certifications for Goodyear’s global operations.

Through its Orient subsidiary, Goodyear buys about $1 billion a year worth of natural rubber.

Last year, Goodyear received an anonymous tip that Fan and Yu were getting kickback payments in connection with the subsidiary’s raw materials purchases, the U.S. Attorney said.

With the cooperation of Goodyear executives, an FBI investigation led to the arrests and charges.

Fan and Yu “engaged in a multi-year scheme designed to steal tens of thousands of dollars from Goodyear,” said Carole S. Rendon, acting U.S. attorney for the Northern District of Ohio.