Guilty Plea in Multi-Million Dollar Investment Scheme that Exploited EB-5 and Stock Investors

Strategic Insights -

The United States Attorney's Office for the Eastern District of New York announced that Sherry Xue Li, 53, of Oyster Bay, New York, pleaded guilty to charges related to a nearly decade-long scheme to defraud investors in a fictitious development project out of more than $30 million. Li, along with her co-defendant Lianbo Wang, operated a complex scheme that targeted foreign nationals, including those in the People's Republic of China, promising them lawful permanent residence in the United States in exchange for investments in the Thompson Education Center (TEC) project.

Key Takeaways:

  • Li and Wang defrauded over 150 investors out of more than $30 million by promising them lawful permanent residence in the United States and guaranteed returns on their investments.
  • The scheme involved the creation of a fictitious development project in Sullivan County, New York, and the use of various companies to launder the funds obtained from investors.
  • Li and Wang used the funds obtained to pay for personal expenses, including clothing, jewelry, housing, vacation travel, upscale dining, and political contributions to prominent politicians.
  • The scheme also involved the sale of access to US politicians at fundraising events, with Li and Wang charging foreign nationals up to $93,000 per person for admission to a June 28, 2017 fundraising event with the then-President of the United States.
  • Li and Wang used the funds obtained from foreign nationals to make unlawful political contributions, which were then used to gain access to the political events and take photographs with elected officials.
  • 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 leading the prosecution.

Statistics:

  • Over $30 million was obtained from investor victims, with approximately $16.5 million from EB-5 investors who were promised green cards and approximately $15 million from stock investors who were promised an initial public offering (IPO).
  • More than 150 investors were targeted in the scheme, including foreign nationals located in the People's Republic of China.
  • The scheme involved the use of various companies to launder the funds obtained from investors, with Li and Wang using the funds to pay for personal expenses and make political contributions.
  • The government's case is seeking to forfeit $31.5 million obtained from the scheme, as well as property at three locations.

Sources:

  • United States Attorney's Office for the Eastern District of New York
  • Federal Bureau of Investigation, New York Field Office
  • Homeland Security Investigations, New York
  • Internal Revenue Service Criminal Investigation, New York
  • United States Citizenship and Immigration Services (USCIS)
  • Federal Election Campaign Act (FECA) and FEC regulations