A senior executive of an investment firm linked to fugitive Chinese billionaire Guo Wengui was jailed Friday for more than two years for fraud.

Lu Tao, who worked for Beijing Pangu Investment, was convicted on charges of obtaining loans and foreign exchange “by fraud”, a court in northeastern China said.

Chinese authorities often use criminal proceedings to punish critics and those perceived as threatening their grip on power.

Dalian Xigang People's Court
Dalian Xigang People’s Court. Photo: Weibo.

Lu and his colleagues, Xie Honglin and Yang Ying, confessed to fraud involving 3.2 billion yuan (US$470 million) in loans from the Agricultural Bank of China.

Lu was jailed for two years and three months, and the company was fined 245 million yuan, Dalian Xigang People’s Court said on its social media account.

Xie and Yang were sentenced to two years in prison with a three-year “reprieve”, it said, suggesting they will avoid jail time.

The three defendants had told the court that Guo, an outspoken critic of China’s ruling Communist Party, was Pangu’s “actual controlling shareholder”.

Guo Wengui
Guo Wengui. Photo: Guo Wengui, via YouTube.

Guo directed them “to apply for loans from the bank with fake contracts, stamps and financial statements, which disturbed financial management order and threatened financial security”, the court said.

Lu and Xie also fraudulently obtained $13.5 million in foreign exchange “with falsified documents”.

Lu told the court he had “privately engraved an official seal” for use on their loan applications.

“I knew (this was illegal),” Lu said, according to video published previously on the court’s social media account.

“It was Guo Wengui who instructed me to do it, under the circumstances at the time I had no choice.”

Guo, who left China in 2014 and currently lives in New York, has denied the allegations.

In recent months Guo has been using social media to make explosive accusations of corruption among China’s powerful, including Wang Qishan, the head of the government’s internal corruption watchdog.

The real estate tycoon is the subject of an Interpol “red notice” for his arrest, a non-binding warrant.

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