2 Chinese nationals charged for defrauding Goodyear

CLEVELAND (Feb. 24, 2016) — Two Chinese nationals have been arrested and charged in the U.S. with wire fraud and honest services wire fraud against their employer, Goodyear.

Xin Francis Fan, 40, and Rex Xu Yu, 41, were arrested Feb. 19 while attending business meetings at Goodyear headquarters in Akron. They will be arraigned Feb. 25 before the Youngstown federal district court.

According to the FBI office in Cleveland, Messrs. Fan and Yu were employees of Goodyear Orient Company (Private) Ltd. (GOCPL), a Singapore-based subsidiary of Goodyear with offices in Shanghai.

GOCPL manages all the natural rubber purchasing, delivery, financing and quality certifications for Goodyear's global operations, the FBI said.

However, according to Goodyear, the tire maker received a tip in 2015 through its confidential Integrity Hotline. The informant told the company that a small group of GOPCL employees, including Messrs. Fan and Yu, had devised a complex scheme to defraud Goodyear of millions of dollars through kickbacks and illegal purchasing.

Goodyear informed the FBI, which began an investigation that led to the arrest of Messrs. Fan and Yu and a criminal complaint against them.

“Goodyear has strict policies against this type of behavior and will take all necessary actions to protect its good name,” the company said in a Feb. 23 statement. “We applaud the actions of the individual to report this criminal activity through our confidential ethics hotline.

“The individual's actions demonstrate the critical role that our associates play in helping identify conduct that, if not reported, can jeopardize our reputation and business,” Goodyear said.

Citing the ongoing investigation, Goodyear declined further comment on the details of the case.

Honest services fraud, according to federal fraud and wire fraud statutes, is “a scheme or artifice to deprive another of the intangible right of honest services.”