Xin Francis Fan, 40, and Rex Xu Yu, 41, were arrested Feb. 19 while attending business meetings at Goodyear headquarters in Akron.
Both were then released on bond after arraignment Feb. 25 in Youngstown, Ohio, federal district court. A $50,000 cash bond was set for Fan, while Yu was released on a $50,000 unsecured bond.
According to the FBI office in Cleveland, Fan and Yu were employees of Goodyear Private Orient (Private) Ltd., a Singapore-based subsidiary of Goodyear with offices in Shanghai.
GOCPL manages all the natural rubber purchasing, delivery, financing and quality certifications for Goodyear's global operations, the FBI said.
However, according to Goodyear, the tire maker received a tip in 2015 through its confidential Integrity Hotline.
The informant alleged that a small group of GOPCL employees, including Fan and Yu, had devised a complex scheme to defraud Goodyear of millions of dollars through kickbacks and illegal purchasing.
Goodyear informed the FBI, which began an investigation that led to the arrest of Fan and Yu and a criminal complaint against them.
“Goodyear has strict policies against this type of behavior and will take all necessary actions to protect its good name,” the company said in a Feb. 23 statement. “We applaud the actions of the individual to report this criminal activity through our confidential ethics hotline.
“The individual's actions demonstrate the critical role that our associates play in helping identify conduct that, if not reported, can jeopardize our reputation and business.”
Citing the ongoing investigation, Goodyear declined further comment on the details of the case.
Honest services fraud, according to federal fraud and wire fraud statutes, is “a scheme or artifice to deprive another of the intangible right of honest services.”