Sherry Li and Lianbo “Mike” Wang were arrested on Monday and charged with conspiracy to wire fraud, conspiracy to launder money and conspiracy to defraud the United States by obstructing the administration of finance laws campaigns by the Federal Election Commission in a complaint that was not sealed on Monday. CNN has reached out to attorneys for Li and Wang for comment.
Prosecutors allege that Li, from his Long Island home from 2013, devised a scheme to defraud investors by convincing them to invest in a bogus plan to build a private school. Wang allegedly served as chief executive of the fictitious Thompson Education Center, the complaint says, and Li and Wang allegedly diverted profits for their personal use, including housing, vacations, clothing, jewelry and political contributions to other prominent politicians.
Prosecutors alleged that Li and Wang acted as straw donors for foreign nationals to illegally make campaign contributions to support U.S. politicians and political committees, including Trump, and that the couple used photos that they had taken with Trump and former first lady Melania Trump to solicit investors to contribute to their project.
CNN has reached out to representatives for Trump and the Republican National Committee for comment.
“As alleged, the defendants enticed their victims to invest in a fraudulent scheme by falsely claiming that their fictitious project had the support of prominent politicians,” U.S. Attorney Breon Peace said in a statement.
“The defendants were able to perpetrate this fraud by then selling access to U.S. politicians by illegally contributing foreign money to political campaigns in their own name and bringing foreign nationals as guests to fundraising events” , added Peace.
Prosecutors allege that Li and Wang, who are both U.S. citizens, brought foreign nationals to fundraisers for U.S. politicians in exchange for payments from the foreign nationals who were used by Li and Wang to make political contributions under their own name, despite several warnings that foreign nationals are prohibited from making political contributions.
Seven of the foreign nationals who attended the event stayed at the same Washington, D.C. hotel as Wang and Li, and their bill was over $31,000, which prosecutors say was paid by Thompson Education Center project funds raised from foreign investors hoping to apply for residency in the United States.
Prosecutors allege that bank accounts controlled by Li and the Thompson Education Center entities received large foreign wire transfers that Li and Wang used to fund large political contributions needed to participate in the fundraiser.
According to the complaint, FEC records show that the joint fundraising committee received a contribution of $270,500 on Li’s behalf and that “financial records indicate that this check was funded by multiple wire transfers totaling hundreds of dollars. thousands of dollars received from bank accounts based in Hong Kong”. A review of FEC donor data from June 2017 shows a contribution of $270,500 to Trump Victory PAC, among other contributions.
The complaint also states that the joint fundraising committee received a check for $329,500 shortly before Wang’s event that “was funded by the same transfers from the Hong Kong-based bank accounts” that funded Wang’s check. Li. FEC donor data shows a $329,500 contribution from Wang to Trump Victory PAC made in June 2017, among others.
Prosecutors also allege that Wang made a contribution in 2016 to an unnamed candidate for Congress. CNN has confirmed that FEC records show a $1,350 contribution made in Wang’s name to a New York congressional campaign in January 2016. Prosecutors allege that Li and Wang received separate donation solicitations from of the congressional candidate stating that contributions “are limited to U.S. citizens and green card holders.” among other requirements. It is unclear whether prosecutors are alleging the donation to the congressional candidate was funded with money from foreign nationals.
As part of the scheme, Li and Wang allegedly solicited donations from foreign nationals who falsely promised they would obtain lawful permanent resident status through an investor program, prosecutors said.
The EB-5 visa program allows foreign investors who make at least $500,000 in investments in specific settings, including stimulating the economy in high unemployment or rural areas and creating jobs for American workers, to apply to United States Citizenship and Immigration Services. for conditional lawful permanent resident status, the complaint states. But projects seeking EB-5 investors are prohibited from guaranteeing that the investors will be granted lawful permanent resident status.
The complaint alleges that the pair raised at least $27 million from more than 150 investors under the program, and $16.5 million was raised from EB-5 investors “who were promised a green card in exchange for their investment”. Prosecutors allege that to date, no EB-5 investor has received a temporary or permanent green card, and instead USCIS has denied multiple applications for temporary green cards because it did not find a credible Thompson Education Center business plan.
Li and Wang reportedly plan to build a cultural theme park in 2011, which they say will be a “Chinese Disneyland” in upstate New York. Li reportedly told investors that the project would create 3,000 jobs.
The two men are also accused of offering for sale the shares of business entities established by Li in an effort to raise funds for the education center, and they allegedly made false statements about the progress of the Listing of shares of one of their companies on the New York Stock Exchange. .
Prosecutors requested in a letter to the court that Li and Wang be released on bail only if they present a bail package with “substantial and significant assets”, surrender their passports, fully disclose their assets and financial holdings, and comply with strict limitations on their movements, calling both “significant flight risks”.