Guilty Plea in Decade-Long Scheme to Defraud Investors and Obstruct Campaign Finance Laws

Strategic Insights -

Sherry Xue Li, a 53-year-old resident of Oyster Bay, New York, pleaded guilty to money laundering conspiracy and conspiracy to defraud the United States by obstructing the Federal Election Commission's (FEC's) administration of campaign finance laws. Li orchestrated a nearly decade-long scheme to defraud investors in a fictitious development project out of more than $30 million. The scheme involved Li and her co-defendant, Lianbo Wang, promising investors that their investments would guarantee them lawful permanent resident status in the United States through the EB-5 investment visa program.

Key Takeaways:

  • Li and Wang defrauded investors in a fictitious development project out of more than $30 million, promising them lawful permanent residence in the United States through the EB-5 investment visa program.
  • The scheme involved Li and Wang falsely representing the progress of the project and its support from government officials, and distributing promotional materials that contained photographs of Li with prominent U.S. politicians.
  • Li and Wang used the funds obtained from investors to pay for personal expenses, including clothing, jewelry, housing, vacation travel, and upscale dining, and to make political contributions to prominent politicians.
  • Li and Wang acted as "straw donors" for foreign nationals to unlawfully contribute to campaigns supporting U.S. politicians and political committees.
  • Li and Wang promised foreign nationals access to U.S. political events and politicians in exchange for a fee, and used the money they received from foreign nationals to fund political contributions.
  • The government's case is being handled by the Office's National Security and Cybercrime and Public Integrity Sections, with Assistant United States Attorneys Andrew D. Reich and Meredith A. Arfa in charge of the prosecution.
  • Li faces up to 20 years in prison and was ordered to forfeit $31.5 million, as well as property at three locations, as part of her plea agreement.
  • Wang, who previously pleaded guilty, was sentenced to 60 months' imprisonment.
  • The scheme involved more than 150 investors, including approximately 16.5 million from EB-5 investors who were promised green cards in return for their investments, and approximately $15 million from stock investors who were promised that an initial public offering (IPO) would take place.

Statistics:

  • More than $30 million was lost in the scheme.
  • Li and Wang spent the funds obtained from investors on personal expenses, including clothing, jewelry, housing, vacation travel, and upscale dining.
  • Li and Wang made political contributions of $600,000 in total to the joint fundraising committee hosting the June 28, 2017 Fundraiser.
  • Li and Wang attended the June 28, 2017 Fundraiser and took photographs with the then-President of the United States.
  • The scheme involved more than 150 investors, including approximately 16.5 million from EB-5 investors who were promised green cards in return for their investments.
  • No EB-5 investor in the TEC Project ever received a temporary or permanent green card and the TEC Project did not have an IPO or list on any stock exchange.

Sources:

  • United States Attorney's Office for the Eastern District of New York.
  • Federal Bureau of Investigation.
  • Homeland Security Investigations.
  • Internal Revenue Service Criminal Investigation.
  • Multi-Media Investments Ltd.