Ching Hua Lin and Haruo Esang were brought in court yesterday morning for arraignment.
A warrant of arrest have been issued against Ching Hua Lin and Haruo Esang on October 29 for conspiracy, violations of the Foreign Investment Act, money laundering, aiding and abetting felony tax fraud and felony tax fraud.Lin is facing 16 counts of aiding and abetting felony tax fraud, 19 counts of conspiracy,Three counts of violation of the Foreign Investment Act and three counts of money laundering.Esang is facing 16 counts of felony tax fraud, 19 counts of conspiracy, three counts of aiding and abetting a violation of the Foreign Investment Act and three counts of money laundering.The affidavit of probable cause submitted by FIB investigator Kenny Sengebau stated that Lin was under investigation for violations of the Foreign Investment Laws, Tax Fraud and money laundering.The affidavit stated that Esang was the documented owner of GF Automotive Enterprise, GF Auto Repair Service and GF Auto Parts.The affidavit stated that Lin has a contract on file at the Department of Labor as an employee of Esang.The contract stated that Esang is earning $1,500 a month.At the course of investigation, it was revealed that Lin owned the GF Auto Parts and GF Automotive Enterprise and GF Auto Repair Services.The affidavit stated that Lin operates the businesses, pays the 15 employees and constructed the building with his own money.The affidavit stated that the businesses are located in Koror with additional storage space at Johnny Reklai’s warehouse in Ngesaol.Lin is staying at the warehouse, the affidavit stated.The affidavit stated that Esang was paid $500 per month to file tax and social security documents for the businesses on behalf of Lin.The affidavit stated that neither the businesses or Lin have Foreign Investment Approval Certificate and they did not apply for one.The affidavit stated that Lin, a Taiwanese national is operating a business in Palau without Foreign Investment Board Approval Certificates and he is using Esang as a “front” for his business.The affidavit stated that GF Automotive, GF Auto Repair Services and GF Auto Parts failed to report the correct amount of income for tax purposes for each quarter from 2004 through 2007 in violation of the laws of the Republic of Palau.The affidavit stated that Esang filed income tax, business licenses and other records in his own name in order to conceal the illegal nature and origin of the proceeds generated from Lin’s business.The affidavit stated that Esang and Lin conspired to defraud the government by “wrongfully allowing” Lin to own and operate a business in Palau knowing that he had no approval from the FIB and conceal the actual gross revenue of the businesses in order to avoid tax .
