• Yahoo is being sued by Chinese dissidents to pay for a fund promised in 2012.

Yahoo is being sued by Chinese dissidents to pay for a fund promised in 2012. (Photo : Getty Images)

In Washington, D.C., Yahoo was sued to force the company to pay for a promised fund for Chinese dissidents. Yahoo was accused of mismanaging a fund that is worth $17 million.

The fund was created in 2007 after Yahoo provided information that led to the imprisonment of two dissidents, Wang Xiaoning and Shi Tao.

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Wang was distributing pro-democracy materials online and was hosting pro-democracy chat rooms on Yahoo. Shi was a journalist who was leaking state secrets to international entities.

After pinpointing Wang and Shi, Yahoo entrusted the fund for dissidents to Harry Wu (now deceased), who used the money for himself. He squandered $13 million of the fund.

Wu extorted more than $1 million for himself and his wife. He spent about $4 million buying real estate in Washington.

He also used more than $800,000 for his own legal bills for an alleged sexual harassment case.

The dissidents only received $700,000. These anti-government activists were mostly imprisoned for expressing their views online.

The latest complaint accused Yahoo of deliberately "turning a blind eye" to Wu's actions.

Yahoo allowed Wu to mismanage the funds as he ran the Laogai Research Foundation, which failed to obtain visas for dissidents who are trying to flee the country.

The timing of the news is unfavorable because the famous website is making finalizations on the sale to Verizon for $4.5 billion.

In 2014, the U.S. Congress interrogated Yahoo co-founder Jerry Yang about his role in the imprisonment of Wang and Shi.

"While technologically and financially you are giants, morally you are pygmies," Rep. Tom Lantos, a California Democrat, said.

Yahoo reiterated that it will fulfill its promise and keep its values intact.

The company released a statement that read, "We are committed to making sure our actions match our values around the world."

Yahoo has not released a statement on the current litigation.