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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 purportedly 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 federal court hearing Thursday, 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 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 worth of natural rubber per year.
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 multiyear 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.
“The FBI takes its responsibility to aggressively protect U.S. companies from the vulnerabilities associated with operating overseas seriously, including significant fraud as alleged in this investigation,” said Stephen D. Anthony, special agent in charge of the Cleveland FBI office.
Fan admitted his involvement in the fraud and implicated Yu in the scheme in a Feb. 19 interview with Goodyear employees, FBI Agent David L. O’Connor said in an affidavit filed in federal court.
O’Connor, a certified public accountant, who specializes in white-collar crime, analyzed computer-use records in this investigation.
With about 66,000 employees worldwide, Goodyear has 49 manufacturing plants in 22 countries.
“Goodyear has strict policies against this type of behavior and will take all necessary actions to protect its good name. We applaud the actions of the individual to report this criminal activity through our confidential ethics hot line,” Goodyear said in an news release.