50 year-old Cary Yan and his wife, 34 year-old Gina Zhou, were arrested and and are being charged by the United States Department of Justice for money laundering, foreign corruption, and for bribing officials in the Marshall Islands to attempt setting up an autonomous mini-state in the nation. The Chinese nationals were arrested in Thailand in November of 2020, extradited to New York on September 9th, 2022, and are scheduled to appear in court on September 13th, 2022. As of now, the pair have plead not guilty to the Department of Justice's charges, which carry up to 20 years of prison for money laundering and up to 5 years for the briberies, which violate the Foreign Corrupt Practices Act. Meanwhile, the government of the Marshall Islands has not yet fully addressed the accusations.
US prosecutors and authorities say that Mr. Yan and Ms. Zhou operated a New York-based Non-Governmental Organization, and began contacting officials in the Marshall Islands starting in December 2016 in an attempt to create a "Semi-Autonomous Region" on the Rongelap atoll. According to a press release and recent reports, the couple paid for flights and accommodations in New York and Hong Kong for at least 6 unnamed Marshall Island officials and lawmakers, where the officials attended meetings and conferences promoting the establishment of a semi-autonomous region. Prosecutors allege that Mr. Yan and Ms. Zhou gave bribes ranging from $7,000.00 to $22,000.00 United States dollars. Mr. Yan was later appointed as a "special advisor" to the Marshall Islands by an unnamed official, and the couple also became naturalized citizens of the country.
In August of 2018, a bill supporting the establishment of the Rongelap Atoll Special Administrative Region was introduced into the Marshall Island Parliament by an official who received bribes from the couple. However, the bill did not pass after strong opposition from former President Hilda Cathy Heine, who accused the bribed officials of working with the People's Republic of China to carve out a "country within a country". In 2019, after former President Heine lost the general election, the new parliament passed a resolution in 2020 that supported the concept of the establishment of the Semi-Autonomous Region, but before a bill to establish it could be introduced, Mr. Yan and Ms. Zhou were detained.
According to American authorities, the Chinese couple have undermined the Marshall Island's national sovereignty, and aimed to create the Semi-Autonomous Region to cut or even remove taxes, change immigration restrictions, and attract foreign investments, which bribed officials attempted to sell as a way to improve the Marshall Island's economic position. Some media outlets speculate that the Semi-Autonomous Region could have been used as an offshore tax haven.
The US Charge Sheet can be found here.
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