CLEVELAND
Two Chinese nationals — Xin Franco Fan, 40, and Rex Xu Yu, 41, — were arrested and charged with receiving kickbacks in the purchase of rubber for Goodyear, according to officials.
Friday’s arrests were made after Goodyear officials got an anonymous tip about the alleged crimes and immediately reported it to law enforcement, officials said.
“The FBI takes its responsibility to aggressively protect U.S. companies from the vulnerabilities associated with operating overseas seriously, including significant fraud as alleged in this investigation,” FBI Special Agent in Charge Stephen Anthony said. “Individuals who participate in fraud schemes should not underestimate the resolve of the FBI to work closely with companies such as Goodyear to root out these schemes and bring the perpetrators to justice.”
According to a criminal complaint, Fan and Yu were employees of Goodyear Orient Company Limited, or Goodyear Orient, a subsidiary of Goodyear, located in Singapore and with offices in China.
Goodyear Orient manages all of the natural rubber purchasing, delivery, financing and quality certifications for Goodyear’s global operations, according to officials.
Goodyear, through Goodyear Orient, spends approximately $1 billion annually to acquire natural rubber for its operations.
As a condition of their employment, Fan and Yu are obligated to act in the best interests of Goodyear when purchasing natural rubber.
In 2015, Goodyear received an anonymous tip that Fan and Yu were receiving kickback payments in connection with Goodyear Orient’s raw materials purchases.
With the cooperation of Goodyear executives, an investigation led to a complaint being filed in federal court and arrest warrants issued for Fan and Yu.
“These two defendants were engaged in a multi-year scheme designed to steal tens of thousands of dollars from Goodyear,” Acting U.S. Attorney Carole S. Rendon said. “Goodyear is to be commended for promptly reaching out to law enforcement when they uncovered this scheme. Because of their quick action, we are now able to hold these men accountable for their conduct.”
The defendants are presumed innocent unless proven guilty.