A Chinese national accused of stealing nearly $4.5 million from a ship building deal in his home country now is facing criminal charges that he laundered some of the money by purchasing an oceanfront hotel in Myrtle Beach.
Gengmin Qiu -- who fled to the United States in 2010, just months before the Chinese government issued an arrest warrant for him -- used at least $900,000 from the stolen money to buy The Sportsman hotel at 1405 S. Ocean Blvd., according to a criminal complaint filed last month in a federal court in New Jersey. Qiu remains in the Essex County, N.J., jail pending further court proceedings. No bond has been set in the case.
The alleged stolen funds came from a deal in which Norwegian transportation company I.M. Skaugen contracted with a Chinese ship builder to construct three chemical tanker vessels. Qiu’s company -- Zhejiang Changda Import and Export Co., Ltd -- was supposed to handle all of the customs paperwork for the ships, including refunding to I.M. Skaugen a value added tax levied by the government on each vessel.
Qiu’s company refunded the tax on the first ship, totaling about $4 million, but Qiu allegedly kept the tax payment on the second ship. Prosecutors say Qiu created a shell company called BD Global Corp. in Parsippany, N.J., and then transferred $1.92 million of the tax funds to a bank account in that company’s name. Another $2.55 million later was transferred to bank accounts Qiu controlled in the United States, according to the criminal complaint.
Qiu fled to the United States before construction of the third ship was completed, according to court documents.
The criminal complaint states that Qiu transferred $900,000 of the stolen money to a lawyer’s trust account in South Carolina to purchase the Myrtle Beach hotel under the corporate name Travelhome 1405 LLC. That real estate deal closed on Jan. 31, 2012. Qiu then opened another bank account in Travelhome’s name and transferred another $100,000, according to the complaint.
An undisclosed amount of money from another bank account purportedly was used to pay for repairs at the hotel, according to court documents.
The hotel, which has been closed for years, has been the subject of intense legal action since last fall, with Qiu and his brother fighting a former business partner over repair expenses, Skaugen’s lawyers trying to seize the property to pay some of the allegedly stolen tax funds and a New York chiropractor claiming he has rights to the property because of a mortgage he gave one of the business partners. All of that legal action is pending in South Carolina and New Jersey courts.
Qiu previously was accused in a civil lawsuit of using stolen funds to buy the hotel as well as properties in New York and New Jersey. Qiu denied any wrongdoing and the lawsuit was terminated in February after Qiu filed for bankruptcy protection. I.M. Skaugen now is trying to recover its money through the bankruptcy case. The transportation company won a $9.6 million judgment against Qiu -- for the alleged stolen money, interest and penalties -- in a 2012 arbitration hearing in China that Qiu did not attend.
Qiu is facing multiple criminal charges, including 10 felony counts of transportation of stolen property, 33 felony counts of engaging in monetary transactions with criminally derived property and one charge of conspiracy to launder money. Qiu has waived his right to a preliminary hearing and no further court hearings are scheduled.
Contact DAVID WREN at 626-0281 or via twitter at @David_Wren_