A former executive at a Chinese oil and gas company has avoided prison in the only U.S. criminal case to emerge from a broad accounting probe of China-based companies listed on American stock exchanges.
Chao Jiang, former vice president of China North East Petroleum Holdings, was sentenced to three years of probation and a $10,000 fine during a hearing Thursday before U.S. District Court Judge Richard Leon of the District of Columbia.
The case against Jiang, 34, came amid a broad regulatory review by the U.S. Justice Department and the U.S. Securities and Exchange Commission of accounting scandals at Chinese companies trading on U.S. stock exchanges.
The SEC has pursued dozens of cases against Chinese companies that entered the U.S. capital markets through backdoor mergers with U.S. shell companies.
The Justice Department took Jiang to trial earlier this year on conspiracy, securities fraud, wire fraud and false statements charges.
Leon dismissed two of the securities fraud counts and declared a mistrial in April after jurors deadlocked on the remaining counts.
In September, Jiang agreed to plead guilty to a count of knowing failure to devise and maintain a system of internal accounting controls at the company.
Jiang's attorney, Michael Li-Ming Wong, said in a statement, "We are ecstatic that our client will never have to spend a single night in jail and can now move on with his career and his life."
A Justice Department spokesman did not respond to a request for comment.
In May 2013, the Justice Department announced the indictment of Jiang for his role in a fraud at China North East Petroleum Holdings.
The company, which was delisted from the New York Stock Exchange in 2012, told investors it planned to use funds from a stock offering for general corporate purposes and to repay prior corporate debt, prosecutors said.
But, prosecutors said, Jiang and the company's chief executive wired $1.2 million of the proceeds to family members who used the money to buy a home, jewelry and a car.
The government also accused Jiang of falsely testifying that no family members received more than $500 from the company, even though some $965,000 had been wired to his father.
He faced up to 63 months in prison under federal sentencing guidelines, though prosecutors agreed to seek only probation. The government also unsuccessfully sought $966,412 in restitution.
