China Resident Indicted on Laundering Millions Through Big Island Properties
A man from Bejing, China was indicted in federal court for laundering millions of fraud proceeds through Big Island properties.
A federal grand jury returned an indictment on June 10, 2021, charging 50-year-old Yao Zhungjun with conspiracy to commit money laundering. The charge stems from Yao’s time as a project manager at JR Simplot Company, an entity operating out of China, which had acquired the Jacklin Seed Company, a producer and marketer of grass seed and turfgrass based in Liberty Lake, Washington. Court documents indicate Yao defrauded Simplot and used real estate developments on the Big Island to route the funds through.
According to the indictment, Yao solicited grass seed orders at artificially inflated prices from Chinese customers and then negotiated kickback payments from those customers in exchange for rebate payments from Simplot. Christopher Claypool, Jacklin’s general manager, approved and Yao collected millions of dollars in kickbacks from just one Chinese grass seed distributor, Beijing Oasis, on more than $10 million in rebates Simplot paid to Beijing Oasis.
The indictment also alleges that Yao and Claypool conspired to defraud Simplot directly.
Specifically, Claypool arranged for seller commissions purportedly owed to a European partner to be paid to Yao through a Citibank Hong Kong account in Yao’s wife’s name. Claypool directed the payment of more than $7.3 million in fraudulent commissions to this account from 2008 through 2014.
As part of the money laundering conspiracy for which Yao was indicted, he and Claypool then routed the proceeds of these schemes through at least six pieces of real estate on the Big Island
From not later than March 2010 and continuing through June 2016, Yao caused more than 55 wires, totaling more than $11.6 million, to be sent from accounts he controlled in Hong Kong to accounts at First Hawaiian Bank for use in the acquisition and development of six parcels under Claypool’s control. From 2010 through October 2018, Claypool developed and then sold those properties for more than $11.4 million and later transferred the proceeds to investment accounts at brokerage firm Edward Jones.
Claypool was separately charged and pleaded guilty to this conspiracy in the District of Oregon. Yao remains at large. If convicted, he faces a maximum sentence of 10 years in prison, a fine of more than $20 million, and three years supervised release.
This case is being investigated by IRS Criminal Investigation and the US Department of Agriculture Office of Inspector General.