Diplomatic fraud suspect indicted, stays behind bars.

By Mathew Yakai in Changchun, China

THE key suspect in the Papua New Guinea diplomatic fraud scandal in Taipei was indicted on Friday.

Taipei Times reports the Taipei Chief Prosecutor Huang Mo-hsin indicted Wu Shih-tsai, on charges of falsifying bank statements and lying to the police after he made up a story about being threatened by an unidentified gunman.

“Prosecutors decided that the evidence was sufficient to find him guilty, so we decided to indict him today,” said Lin Chin-chun, spokesman for the Taipei District Prosecutors’ Office, during a press conference on Friday. Wu has been in custody since May 6.

According to Taipei Times, the procedure states that once indicted, the defendant must be immediately released, but Wu remained in detention after a request for an extension was granted by Taipei District Court Judge Chang Yung-hung after evidence found that he was trying to leave the country.

Wu and Ching Chi-ju, the other main suspect in the diplomatic scandal, were commissioned in August 2006 by the Ministry of Foreign Affairs and former National Security Council secretary-general Chiou I-jen to act as intermediaries in an attempt to forge diplomatic relations with Papua New Guinea.

Timothy Bonga, the MP for Nawaeb and lawyer Dr Florian Guban were alleged to have negotiated with Taipei for diplomatic exchange over a US$29.8 million. Bonga was Eda Ranu boss at that time.

The allegation has been categorically denied and the National Government is currently tightlipped on the issue.

Taipei Times reports the Taiwanese Foreign Affairs Ministry agreed to wire US$29.8 million into Wu and Ching’s bank account at a branch of OCBC Bank in Singapore.

The funds were to be transferred to the Papua New Guinea government once the two nations had signed a diplomatic communiqué.

Sir Michael Somare was the prime minister at the time of the alleged scandalTaiwan failed to develop relations and in December 2006 the ministry asked for its money back.

Ching allegedly refused to return the funds and has since disappeared, reports Taipei Times.

Chiou, former minister of foreign affairs James Huang and former deputy minister of national defense Ko Cheng-heng all resigned over their involvement in the diplomatic scheme.

Ching, who is a US citizen, is believed to be at large in the US.