WASHINGTON | Thu Jul 15, 2010 7:00am IST

WASHINGTON (Reuters) - U.S. authorities filed to recover property in New York and Virginia tied to portions of illegal bribes paid to the former president of Taiwan and his wife, the U.S. Justice Department said on Wednesday.

Taiwan's former president Chen Shui-bian and his wife Wu Shu-jen were convicted in Taiwan in 2009 on money laundering and bribery charges involving about $20 million that prosecutors said the couple illegally accepted.

They were both sentenced to life in prison but recently won on appeal reductions to 20 years each. Chen has rejected the charges, calling them politically motivated, his foundation has said. He is appealing to the Taiwanese Supreme Court.

The Justice Department filed complaints in U.S. courts to recover a Manhattan condominium in a luxury building a few blocks from New York's Madison Square Garden and a house outside Charlottesville, Virginia.

If the properties are obtained by the U.S. government, they would be sold and the proceeds deposited into a forfeiture fund and then made available to share back with Taiwan, according to Justice Department spokeswoman Laura Sweeney.

The U.S. complaints said Yuanta Securities Co Ltd paid about $6 million to Wu in an illegal bribe to ensure the Taiwanese government did not interfere with a deal for the firm to buy more shares of Fuhwa Financial Holding Co Ltd.

Wu was accused of directing the money through shell companies and Swiss bank accounts, after which some was then used by her son and daughter-in-law to secretly acquire the two properties in the United States, according to the complaints.

The son, Chen Chih-Chung, and his wife, Huang Jui-Ching, were also convicted on money laundering charges. All four are facing additional graft charges in Taiwan.

In office, Chen angered China with his pursuit of formal independence for Taiwan, a self-ruled island over which Beijing has claimed sovereignty since 1949. His rhetoric upset the United States, Taiwan's staunchest informal ally, as it urged Taiwan and China to make peace.

Last year, Chen tried to petition a U.S. military court to win release from prison on the basis that the United States still controlled the island off mainland China. The court dismissed the petition, citing a lack of jurisdiction.

(Reporting by Jeremy Pelofsky; editing by Todd Eastham)