Diamonds Aren’t Forever: Gross Misappropriation in a Modern-Day Corporate Scandal
Over the years, my enterprise, the Washington D.C.-based Arcadia Foundation, has pursued justice and freedom from corruption in both the private and public sectors, in instances all around the world. We choose to engage when there are often conflicting ‘truths’ and pride ourselves on our ability to, from exhaustive due diligence, decipher through arguments that can, on the surface, be effectively made in support of or against the agendas of the accused.
Along the way, whether in Venezuela, Uganda or indeed the United States, we have been taken aback by certain cases; we felt compelled to reflect upon those that have called on our help or indeed the perpetrators whose malpractice needed to be brought to light and regret the losses of the victims, monetary or otherwise. Indeed during our engagements, we have witnessed abuses in morality we won’t soon forget. And then there is the case of one Mr. Eric Po-Chi Shen and an on-going lawsuit posed against him occurring presently in the 160th Judicial District of Dallas, Texas.
While the Arcadia Foundation has run across tales of mass theft before, never have we had to bear witness to an instance of a private citizen embezzling so much from a private entity and moreover, choosing to spend what was stolen on a lifestyle so exceedingly grandiose. The Texas case in question’s initial findings prove self-serving, truly defy reasonable comprehension and subsequently pose a call to action with regard to American law, for justice to be served.
From 2008 onwards, Mr. Eric Po-Chi Shen (henceforth ‘Eric’) allegedly misappropriated funds to the tune of $242 million from Mr. Zhao Hua Chen, a successful international entrepreneur and at one time, a trusted business confidant of the accused. As Mr. Hua Chen looked to diversify his portfolio into foreign markets, an exciting endeavor buttressing globalization, one would have to suspend disbelief to imagine the corporate conspiracy to take place would occur from a domestic source; a family friend named Eric.
Capitalizing on Mr. Hua Chen’s lack of English and acting under the moniker of ‘Financial Advisor,’ Eric not only began siphoning off secured international real estate and mineral-related business deals for personal use, but greatly exaggerated the prices of such arrangements to his client in order to personally gain. This systemic corruption, corporate graft and abuse of trust took place for years; however, how Eric spent his newly amassed earnings warrant commentary, as they are even more sensational, breaking from logic and certainly justified interpretation. In addition to purchasing a fleet of luxury cars, including a 1963 250 GTO Ferrari, a McLaren F1 and Aston Martin DB4 circa 1966, properties for family, including a $4.6 million dollar home for his wife ‘Feny,’ Eric purchased 34 rare red diamonds, the latter worth over $70 million alone.
As the case unfolds, it is often easy for us to turn a blind eye towards any amount stolen from a lucratively successful enterprise, as if they are too big to not only fail but be perceived as victims of a malicious act of mass expropriation. Television shows such as American Greed and To Catch a Con Man take it upon themselves to shed light on victims of criminality, however not the companies that so too fall under the scalpel of thievery. Yet corruption is corruption, be it embezzlement within governance public or private.
In any case, the trickle down of an enterprise losing capital affects jobs, livelihoods and subsequently, families. While this particular scenario is unusually incongruous in the nature of its corporate betrayal, with its journey and the investigation that will follow in Texas and indeed the international press far from over, it is not uncommon in the high-stakes arena of international business. And so it is in our hands to create lasting change.
The American legal system must show valor in its determinations and hold those accountable for their illegal actions and commitments to make it right. Without question, this case is proof positive that capitalism cannot function without conviction. For, as Nobel laureate Kenneth Arrow once observed, “Virtually every commercial transaction has within itself an element of trust.” And trust was perhaps the greatest casualty of all in a decade of friendship in China that has forcibly concluded in Texas.