Two From OBay Charged in $27M Fraud
By Rupert Deedes
A criminal complaint was unsealed on Monday, 18 July, in Brooklyn federal court charging Sherry Xue Li and Lianbo Wang with a $27 million fraud and money laundering conspiracy.
Li and Wang, both naturalized U.S. citizens, were arrested on Monday in Oyster Bay.
They are charged with running a massive, multi-layered fraud scheme targeting foreign nationals ranging from a sham real estate investment, promised benefits for payment, the solicitation for access to U.S. politicians, to making illegal donations for campaigns.
As alleged in the complaint, Li and Wang orchestrated a nearly decade-long scheme to defraud investors in a fictitious project to develop, build and operate a “private educational institution” in Sullivan County, New York, called the “Thompson Education Center” (the TEC Project).
The defendants solicited investors, many of them foreign nationals located outside of the United States, by falsely representing the progress they were making on the TEC Project and its support from government officials, including by sending investors and prospective investors promotional materials that included photographs of Li, the TEC Project’s President, with prominent U.S. politicians.
Many foreign national victims were persuaded to invest in the TEC Project by, among other things, the defendants’ false assurances that their $500,000 investments would guarantee them lawful permanent residence in the United States through the EB-5 Investment Visa program.
Instead Li, Wang and other members of the conspiracy siphoned off and stole the money by transferring the funds through bank accounts held in the names of various shell companies that Li had created.
Once the funds were in those accounts, Li and Wang used the funds to pay for numerous personal expenses including clothing and accessories, jewelry, housing, vacation travel, upscale dining, and political contributions to prominent politicians.
As of July 2022, more than 150 investors invested over $27 million, including approximately $16.5 million from EB-5 investors who were promised a Green Card in return for their investment.
To date, no EB-5 investor in the TEC Project has received a Green Card.
Li and Wang also acted as “straw donors” for foreign nationals to unlawfully contribute to US political campaigns. Using US nationals as “straw donors” for foreign people and entities, is a felony.
For example, Li and Wang charged twelve foreign nationals $93,000 per person for admission to a June 28, 2017 fundraising event with then-President Donald Trump. Li and Wang used the funds that they collected from the foreign nationals to unlawfully make $600,000 in political contributions in their own names—$270,500 from Li and $329,500 from Wang—to Trump’s joint fundraising committee.
Li and Wang later used a photograph of Li and Trump taken at the fundraiser to solicit more investments in the TEC Project.
“The staggering scope of this alleged fraud was facilitated by an abuse in the investor visa process,” said NY Acting Special Agent in Charge Ricky Patel. “We will continue to aggressively investigate attacks on the integrity of the framework that allows access to the United States.”