Lawyer indicted for defrauding Tzu Chi with false vaccine procurement scheme

Taipei, Aug. 6 (CNA) A lawyer and a vaccine broker were recently indicted by the Taichung District Prosecutors' Office for defrauding Taiwan's Buddhist Compassion Relief Tzu Chi Foundation out of US$30 million by falsely claiming they could procure COVID-19 vaccines.

Chen Yu-hsuan (陳昱瑄), former chairwoman of the Changhua Bar Association, a self-proclaimed vaccine broker surnamed Lee (李), and 15 alleged accomplices were indicted on charges including fraud, embezzlement, falsifying business records, tax evasion, aiding and abetting tax evasion, falsifying accounting documents, aggravated money laundering and money laundering, according to a news release issued by prosecutors on Thursday.

Prosecutors said the court approved incommunicado detention for Chen and five others, citing strong suspicion of money laundering and concerns over flight risk, collusion and destruction of evidence. Lee remains at large and is wanted by the authorities.

According to prosecutors, during the COVID-19 pandemic in 2021, Chen and Lee falsely claimed to Tzu Chi that they could procure Pfizer-BioNTech (BNT) COVID-19 vaccines and that they had previously assisted several major companies in purchasing vaccines.

Based on those claims, Tzu Chi commissioned a management consulting firm represented by Chen to procure 5 million doses of the BNT vaccine and paid a US$30 million (about US$960 million) commission, excluding the costs of the vaccines and cold-chain logistics, prosecutors said.

To conceal the source and flow of the illicit proceeds, Chen allegedly colluded with friends, family members and assistants to transfer the funds through the accounts of multiple companies before withdrawing a total of NT$520 million (US$16.11 million) for Lee and other accomplices to use.

Prosecutors also alleged that Chen colluded with several shell companies to issue 33 fraudulent invoices to inflate business expenses and evade business tax, corporate income tax and undistributed earnings tax totaling NT$53.74 million. They further alleged that the group purchased about 232 kilograms of gold worth about NT$410 million in an attempt to conceal the illicit proceeds.

On April 30 and May 20, prosecutors conducted searches and questioned a total of 28 suspects and witnesses. They seized NT$93.08 million in cash, 158.8 kilograms of gold with an estimated market value of about NT$680 million, and two imported luxury vehicles.

The court also approved the seizure of the defendants' assets, including bank accounts and real estate, prosecutors said.

More than NT$1.12 billion of illicit gains were confiscated, they said.

Separately on Thursday, the Ministry of Justice Investigation Bureau said in a news release that the case was uncovered through an investigation by its Northern District Mobile Team.

The bureau condemned Chen and Lee for allegedly exploiting Tzu Chi's pandemic relief efforts for personal gain, saying their actions seriously disrupted social order and harmed the public interest.