Two New York residents have been arrested for allegedly defrauding investors of $27 million, in part by promising them access to prominent politicians such as former President Donald Trump, the Justice Department announced on July 18.
The two individuals, Sherry Xue Li and Lianbo “Mike” Wang, perpetuated a near-decade-long scheme from as early as May 2013 to lure investors into a fictitious project to develop a private educational institution where Li served as the president, according to a complaint unsealed on July 18.
The institution, the Thompson Education Center or the TEC Project in New York’s Sullivan County, became a front for Li and others to siphon funds from more than 150 victim investors, according to the filing.
Through the TEC Project, 50-year-old Li and 45-year-old Wang, along with co-conspirators, raised $16.5 million from investors who were promised a green card in return for a $500,000 investment through the EB-5 investment visa program, as well as $11 million from stock investors on the project’s IPO that they were assured would take place.
Li and others misappropriated and laundered at least $2 million of these funds and spent at least another $2.5 million on “various personal expenses with no clear business purpose,” according to the filing.
The personal expenses included clothing, accessories, jewelry, housing, vacation travel, high-end dining, and political contributions to prominent U.S. officials.
Li and Wang were charged with wire fraud conspiracy, money laundering conspiracy, and conspiracy to defraud the United States by obstructing the federal administration of campaign finance laws. Both are naturalized U.S. citizens who are originally from China.
Selling Access to the Former President
Li and Wang used the money they received to fund political contributions to gain access to political events and take photographs with the elected officials, prosecutors alleged. Such photographs in turn became their bait to attract more investment in the TEC Project.The pair and 12 foreign guests attended a June 28, 2017, fundraising event and took photos with Trump, the filing said. The foreign guests—11 Chinese nationals and one Singaporean—were charged an admission fee of $93,000 each. The pair then used the funds to unlawfully make a $600,000 campaign donation to the Republican National Committee, which hosted the event, according to the Justice Department.
A photo of Li smiling side by side with Trump and then-First Lady Melania Trump was later featured in a TEC marketing brochure, the court document states. Wang told one Chinese national in 2018 that they could pay $220,000 if they wanted to meet the president and members of Congress.
‘Chinese Disneyland’
In about 2011, Li and Wang announced plans to build a Chinese cultural theme park named China City of America (CCOA), according to the court document. Li touted the project as a “Chinese Disneyland” with an amusement park, mansions, business center, medical facility, college, and residential homes, with the potential to draw 1.5 million annual visitors and create 3,000 jobs.That proposal was abandoned after skepticism from local officials and residents, according to the filing. Li instead began promoting a vision of a for-profit university, the TEC Project.
Despite lacking approvals from the Town of Thompson, New York, to begin construction, Li and Wang continued to assure investors that the project was on track for development, according to the filing.
When asked for updates in 2019, Li responded by sending pictures and videos purportedly showing the project’s construction, while they were in fact footage of a single-family residence that Li was building in the nearby town of Fallsburg, New York.
False Green Card Promises
None of the EB-5 investors have received a temporary or permanent green card to date, the complaint notes. U.S. Citizenship and Immigration Services (USCIS), which oversees the EB-5 project, had instead been issuing notices to investors of the TEC Project since March 2017 that it may deny the green card requests “because USCIS did not find TEC’s business plan credible.”According to prosecutors, the TEC Project promised to construct two college classroom buildings, two college student activity centers, a sports center, a community center, and six student dormitories that involve 132 units of townhouse-style housing, 200 two-bedroom apartments, and 50 three-bedroom apartments.
The USCIS questioned whether such a plan was feasible in Sullivan County, a “rural county with no infrastructure available for high-density projects,” according to the filing.
“Not having a plan to address basic infrastructure needs of a project of this size in a rural county provides little to no credibility to both the business plan and the job creation estimates,” the USCIS wrote in the notice, according to the complaint.
At least 26 investors in the TEC Project received such notices, with 16 of them ultimately leading to the denial of their green card petitions.
Despite that, Li and Wang continued to solicit funds and repeatedly assured investors that their investment would guarantee a green card, telling several of them they could get a green card within nine months.
Wang had raised concerns about their scheme, writing in one text message in July 2016. “U.S. immigration law does not allow guarantee agreements. ... This is illegal,” the filing shows.
“Tens of millions of dollars came in from investors and straw donors, who expected their money would bear fruit. However, only one promise came to fruition, the access to political power,” FBI Assistant Director-in-Charge Michael Driscoll said in a statement. “Foreign money pollutes our immigration and democratic processes, and we must do all we can to protect them.”
Trump, representatives for the Republican National Committee, and Li’s lawyer, Nora Hirozawa, didn’t respond to requests for comment by press time. Wang’s lawyer, James Roth, declined to comment.
