Mckinney Tsai (蔡友才), former chairman of Mega Financial Holding Co (兆豐金控), the state-run financial institution embroiled in a money laundering investigation, was late on Friday released by prosecutors on NT$3 million (US$95,081) bail after being summoned for questioning.
While prosecutors declined to disclose details of the questioning in their probe into the bank’s operations, local media reported yesterday that the banker was aware of violations of US money laundering regulations by the New York branch of Mega Financial subsidiary Mega International Commercial Bank (兆豐銀行) during his tenure, but he failed to take action to deal with the problem.
Tsai was barred from leaving the nation after his release.
Wang Chi-pang (王起梆), a former chief secretary of Mega Financial who was an aide to Tsai, was released on NT$2 million bail and barred from leaving Taiwan after being questioned by prosecutors.
Tsai and Wang have been named as defendants in the investigation, according to prosecutors.
On Aug. 19, the New York State Department of Financial Service imposed a US$180 million fine on Mega Bank after identifying “a number of suspicious transactions” between its New York and Panama branches.
Mega Bank has been accused of failing to comply with legal requirements, as the bank did not report to US authorities suspicious transactions made by its clients.
Prosecutors are also conducting a probe, summoning people, such as Tsai, to determine what happened.
Before Friday’s questioning, Tsai had been summoned by prosecutors three times since the case surfaced, but each time was released without bail.
Prosecutors summoned Tsai again on Friday, while a team of investigators launched raids on Tsai’s and Wang’s homes and went through documents from related government agencies about the case on the same day.
Prosecutors seized e-mails from Tsai’s cellphone and data from his notebook computer for further investigation.
Citing sources from the investigation team, the media reports said prosecutors suspected that Tsai had ignored the US probe into money laundering and failed to deal with it, adding that his inaction led Mega Bank to receive such a large financial punishment.
Mega Financial received a report on the money laundering case from US authorities in February and Tsai had full knowledge of the case, but failed to take action, the reports said, adding that prosecutors believe that Tsai violated the Banking Act (銀行法).
The transactions at the New York branch took place in 2012 and were uncovered by the department during an audit conducted between January and March.
Mega Bank is the first Taiwanese bank to face such a penalty for breaching US money laundering regulations.
After the heavy fine was imposed on Mega Bank, the banking group’s governance and management were called into question, prompting the Cabinet to set up a task force to investigate the case to find out who should be held accountable.
Tsai resigned his chairmanship in March, citing health reasons.
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