A Chinese-American woman has been expelled from China after receiving a life sentence for letter of credit (L/C) frauds involving nearly US$26 million, according to the Chinese state press.

The Beijing No. 2 Intermediate Court convicted Li Xiaoyuan, apparently in the last week of March, for falsifying documents and official seals. She used these in a bid to obtain 14 L/Cs from two Chinese banks, the Jinghua Times reported. She was expelled from the country immediately after the verdict, it said.

Three Gorges Dam

Also convicted in the case was You Weijian, a manager at the Yangtze Three Gorges Development Company, an affiliate of the China Three Gorges Economic Development Corporation, the paper said.

The Three Gorges Dam, the biggest dam construction project in the world, has already appeared a focus for corruption, including a scam involving the embezzlement of funds meant to assist the relocation of nearly a million people who must move to make way for the dam.

False documents

The court sentenced You to 12 years in prison for helping Li falsify foreign trade contracts, credit application forms and related credit documents, the paper said. According to the Beijing Times the pair defrauded two banks in 1997-98 using forged L/Cs.

Through L/Cs issued by the Bank of China and the Construction Bank of China, the two received US$25.7 million in funds from banks outside of China, according to the reports. Li was apparently the representative of the Dongfang Tiandi Conglomerate in Beijing, and the pair are reported to have used the money to pay debts owed by Li's brother and make investments.

Washington protests

Newspaper reports on the case do not say when Li and You were arrested or when the trial took place although it seems that Li became at least the second Chinese-American to be sentenced to prison in March by China.

Fong Fuming, a 67-year-old Chinese-born engineer from New Jersey, was sentenced earlier in the month to five years in prison on charges of stealing state secrets and paying bribes while trying to help foreign investors win Chinese power projects.

The US government has protested Fong's case, saying Chinese authorities violated international standards by holding him for months without indicting him. Despite pressure from Washington, Fong has not been expelled from China.

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