Former officials of Chinese company charged with fraud in US

Two former top officials of a Chinese oil and gas company have been charged by US federal authorities with defrauding American investors in connection with public offerings of stock.
Wang Hongjun, 41, and Chao Jiang, 32, both Chinese citizens residing in California and New York, respectively, were indicted on May 23, with conspiracy to commit wire and securities fraud and four counts of securities fraud, the Department of Justice said.
Hongjun served as the president and CEO of China North East Petroleum Holdings Limited (CNEP), an oil and gas company whose stock is traded in the United States from 2009 to 2010, and as the chairman of the Board of Directors beginning in 2010.

Jiang served as the vice president of corporate finance and corporate secretary of CNEP from 2008 until 2011.
Charge carries a maximum penalty of 25 years in prison.
The indictment alleges that, instead of using the offering proceeds as represented to CNEP's investors, Hongjun and Jiang misappropriated approximately USD 1,265,000 of the proceeds by wiring the money to bank accounts in the name of their family members.
In addition, the indictment alleges that Jiang testified falsely under oath to the Securities and Exchange Commission about these transactions.
Jiang also testified falsely regarding the use of proceeds from the securities offerings.