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Chens to sign. These checks were drawn on accounts that PCTI
kept at several banks. Mr. Chen kept signature authority over
them all, giving Mrs. Chen cosigning authority over only one.
In September 1998, PCTI contracted with Beam Technology, a
Singapore company, to buy computer processor chips. The chips
were shipped, but then lost in transit. Mr. Chen spotted the
opportunity: He submitted a claim to his carrier, Chubb
Insurance, stating that PCTI had paid $292,000 for the shipment.
This was a lie--PCTI had paid nothing at all. Chubb, relying on
Mr. Chen’s representation, sent a $287,000 check to PCTI to cover
the alleged loss, less a $5,000 deductible. Mr. Chen then
directed Mrs. Chen to open a new bank account in the name of Beam
Technology. No one ever told Beam that the account existed, and
only the Chens had signature authority. Once the account was
opened, Mr. Chen signed a check from PCTI labeled “refund
prepaid” for $287,000, which Mrs. Chen deposited. We
specifically find that the Chens’ purpose in opening the account
was to make it seem that the insurance proceeds were being used
to pay off PCTI’s debt to Beam, while allowing them unfettered
access to the money.
After the check cleared, Mr. Chen transferred $154,409.28
back to PCTI. He directed Ms. He to record the money on PCTI’s
books as payment on an outstanding account receivable from
Citirom, one of PCTI’s customers--one that had several
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