Taipei court acquits retired officer over cash pipeline that funded a Chinese spy ring

The Taipei District Court on 11 November acquitted a retired Taiwanese army lieutenant colonel of money laundering in a case over how about NT$11.13 million was moved into Taiwan to finance a spy network run for China, while convicting the underground remittance operator who handled the transfers. The ruling can still be appealed, according to reports by United Daily News, the Liberty Times and the China Times.

The acquitted defendant, Wang Wen-hao, formerly served in the army command's combat readiness and training division. The money mover, a man surnamed Chen, was sentenced to two years in prison for breaching the Banking Act, suspended for four years. He was also ordered to pay NT$300,000 to the national treasury and to forfeit NT$400,000 in criminal proceeds, the reports said.

The verdict closes the financial strand of one of Taiwan's most serious recent espionage cases. The court dismissed the charges against the alleged ringleader, Ding Xiaohu, a Hong Kong registered mainland Chinese national who died of illness earlier this year, because a defendant who has died cannot be tried.

According to prosecutors, Ding sat on a foreign affairs committee of the people's congress in Changsha but was acting on instructions from the Nanning station of the Liaison Bureau under the Political Work Department of China's Central Military Commission. Prosecutors said he began taking those instructions in 2018 and travelled to Taiwan repeatedly, using Mazu temple exchanges, business trips and tourism as cover to build an intelligence network.

Investigators said Ding first recruited two Taiwanese civilians and two retired lieutenant colonels, Wang and Tan Chun-ming, who had been classmates at the military academy. The retired officers then drew on old military contacts to recruit a serving army sergeant major and three serving officers, two from the air force's air defence and missile command and one from an army testing centre.

Prosecutors said Ding moved money provided by Chinese authorities into his own account and then had it converted into New Taiwan dollars and sent through eight bank accounts controlled by the remittance operator. Members were paid in cash according to how sensitive the information they supplied was judged to be.

Beyond collecting military information, the network was told to lobby serving officers to lead their units in passive non-resistance if war broke out across the Taiwan Strait, according to prosecutors.

The national security charges were handled separately by the High Prosecutors Office. In July, Taiwan's Supreme Court made final the sentences of seven years for Wang, seven years and two months for Tan and six years for the sergeant major, Lu Fang-chi. It sent the cases of the other three serving officers back to the High Court for retrial, where they remain pending.

The acquittal concerns only the laundering charge against Wang and does not affect his final espionage conviction. Two Taiwanese civilians accused of being core members of the network also died during the investigation, and prosecutors dropped the cases against them.

Taipei prosecutors had argued that funnelling money into Taiwan through an informal transfer channel outside the banking system kept the network supplied and harmed the country's financial order, and they had asked the court to impose heavy sentences on all three defendants. The court's reasoning for acquitting Wang was not detailed in the reports.