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United States Attorney Southern District of New York

United States Attorney
Southern District of New York
FOR IMMEDIATE RELEASE CONTACT:
U.S. ATTORNEYS OFFICE
JULY 8, 2004


MARVIN SMILON, HERB HADAD,
MEGAN GAFFNEY
PUBLIC INFORMATION OFFICE
(212) 637-2600
U.S. ANNOUNCES GUILTY PLEAS OF METAL TRADERS
ENGAGED IN $50 MILLION FRAUD SCHEME
DAVID N. KELLEY, the United States Attorney for the
Southern District of New York, and PASQUALE DAMURO, Assistant
Director In Charge of the New York Office of the Federal Bureau Of
Investigation (FBI), announced today that RAYMOND YIU and KELVIN
YIU, officers of several privately-held scrap metal trading
companies incorporated in the State of New York and having their
principal places of business in New York, New York, pleaded guilty
to bank fraud and conspiracy to commit bank fraud charges, arising
out of a scheme to defraud seven banks out of approximately
$50,000,000 through the submission of false and fraudulent loan
applications, and false and fraudulent financial statements and
audits on behalf of the metal trading businesses.
The charges arise from the YIUs operation of Ever-
Glitter International, Ltd. (Ever-Glitter), Pacific Rim
Resources, Inc., Eastars Resources Exchange, Inc., Maxwell Metals
Inc. , and Gulf Enterprises Inc. (collectively referred to as the
Ever-Glitter Companies or Companies). According to the 2
Indictment, which was filed on March 11, 2004 and unsealed on March
16, 2004, the Ever-Glitter Companies engaged in the metal trading
business, specializing in the trading of ferrous and non-ferrous
metal scrap and the shipping of metal scrap to customers for
recycling and re-use. As set forth in the Indictment, the Ever-
Glitter Companies purchased metal scrap from suppliers in the
United States and Europe, mostly on a cash-in-advance basis;
maintained their inventories at their suppliers; and sold and
shipped the metal scrap to customers located in countries along the
Pacific Rim, including China, South Korea and Taiwan. RAYMOND YIU,
it is alleged, was an officer of each of the Ever-Glitter Companies
and controlled day-to-day operations of the Companies, including
their metal trading businesses and new business development.
RAYMOND YIUs brother, KELVIN YIU, according to the Indictment, was
an officer of each of the Ever-Glitter Companies, and was
responsible for the financial operations of the Companies and for
maintaining their banking relationships.
The Indictment alleges that, to finance the Ever-Glitter
Companies continuing operations, RAYMOND YIU and KELVIN YIU sought
and received financing from seven federally-insured banks.
According to the Indictment, the Companies sales decreased
dramatically in 1997, and, in order to maintain their loans and
lines of credit and to conceal their diminished business, RAYMOND
YIU and KELVIN YIU created false and fraudulent annual audited 3
financial statements, semi-annual CPA-reviewed financial
statements, quarterly management-certified financial statements,
accounts receivable aging schedules, and inventory reports, and
caused those false and fraudulent records to be submitted to banks
that were asked to make available or had made available loans and
lines of credit to the Ever-Glitter Companies. According to the
Indictment, RAYMOND YIU and KELVIN YIU also commingled the Ever-
Glitter Companies inventories and receivables, and frequently used
receipts of one Ever-Glitter Company or borrowed funds of one
Company to make payments on the loans of another Ever-Glitter
Company. In total, from January 1, 1998 through August 2002, it is
alleged, the banks extended the Ever-Glitter Companies over
$50,000,000 in loans and lines of credit. In or about July 2002,
the Ever-Glitter Companies defaulted on their loans and ceased
operations, according to the Indictment.
According to the Indictment, RAYMOND YIU and KELVIN YIU
retained an outside accountant for the Ever-Glitter Companies and
caused that accountant to certify falsely that he had independently
audited the Ever-Glitter Companies books and records on an annual
basis and reviewed the Ever-Glitter Companies books and records
semi-annually. According to the Indictment, the accountant falsely
certified that independent audits of the Ever-Glitter Companies had
been performed, when in fact they had not, and that the audits 4
verified the financial information submitted to the banks by the
Companies. It is alleged that RAYMOND YIU and KELVIN YIU denied
all attempts by the financing banks to verify the financial records
of the Ever-Glitter Companies as well as the outside audits of the
Companies books.
RAYMOND YIU, age 50, resides in Fort Lee, New Jersey, and
KELVIN YIU, age 48, resides in Manhassett Hills, New York.
RAYMOND YIU and KELVIN YIU pleaded guilty today, before
United States District Judge HAROLD BAER, to one count of bank
fraud and one count of conspiracy. Sentenced has been scheduled
for October 7, 2004, at 11:00 am. At sentencing, the defendants
each face maximum terms of 35 years imprisonment and fines up to
$1,000,000 or twice the loss resulting from the offenses. The
defendants will also be required to pay restitution to the victims
of the fraud scheme.
Mr. KELLEY praised the efforts of the Federal Bureau of
Investigation in conducting the investigation.
Assistant United States Attorney DANIEL RUZUMNA is in
charge of the prosecution.
04-141
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