Prosecutors recommended that Wu Shih-tsai (pictured above), who is serving time in a local jail for other offenses, be given a 4.5-year prison sentence for embezzling US$29.8 million in government funds along with his accomplice.
The Taipei District Prosecutors Office said in the indictment that the Ministry of Foreign Affairs wired the money into a joint account held by Wu and Ching Chi-ju in a Singapore bank in September 2006 to be used to facilitate the establishment of diplomatic ties between Taiwan and the Pacific country.
The diplomatic bid failed, but the duo did not return the funds to the ministry, which found out later that the funds had been completely withdrawn from the bank account between November and December that year.
Wu was arrested by law enforcement authorities when the scandal came to light at the end of former President Chen Shui-bian's second term in May 2008, but Ching managed to flee to the United States.
As the case involved confidential information, the prosecutors office did not reveal details of the results of its investigation in accordance with provisions of the Classified National Security Information Protection Act.
They would only say that Wu was indicted for breach of trust because he siphoned off government funds after failing to fulfill his promised mission.
As Wu is a civilian with no official function, he can only be indicted based on the Criminal Code rather than the Anti-Corruption Statute that mainly applies to corrupt dealings by public functionaries, prosecutors said.
They also asked the court to freeze any funds in Wu's bank accounts and confiscate all real estate holdings under his name.
The government has pursued other means to recover the embezzled funds. In a civil suit filed in Singapore by the Foreign Ministry, a Singaporean court ruled that Taiwan was entitled to the sum of US$29.8 million plus interest earned on the account between the deposit date and the verdict date.
A ministry statement issued last May said it believed that at least US$10.52 million of the lost funds could be retrieved, pointing to the US$6 million frozen in a Singapore account in Ching's name and the US$3 million in a Singapore account held by Wu.
The ministry has successfully retrieved about US$7 million of the lost funds to date.
Wu is presently serving time in a Taiwan jail after he was convicted in October 2008 on charges of forgery and making false accusations related to the Papua New Guinea case and on an unrelated cigarette smuggling charge.
He was sentenced to 30 months in jail and began serving the sentence in May 2009.
Prosecutors said investigations of other suspects in the case, including Chiou I-jen, secretary-general of the National Security Council, and former Minister of Foreign Affairs James Huang, are still ongoing. They are also investigating whether other former and incumbent officials are involved in the case.
Wu's accomplice Ching is on the wanted list.
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