An Oyster Bay woman pleaded guilty in federal court on Wednesday, July 30, to money laundering and conspiracy to defraud the U.S. in connection with schemes that netted her and a partner over $30 million in exchange for falsely promising legal residency and access to political officials, including President Donald Trump, and making illegal political contributions, according to the U.S. Department of Justice.
When sentenced, Sherry Xue Li faces up to 20 years in prison. As part of her plea agreement, Li agreed to forfeit $31.5 million and property at three locations.
Co-defendant Lianbo Wang, also from Oyster Bay, pleaded guilty last year to engaging in unlawful monetary transactions and conspiracy to defraud the United States, and was sentenced to 60 months in prison.
The DOJ said the two women defrauded investors, many of whom were foreign nationals from China, persuading them to invest in a development project called the Thompson Education Center, also known as the TEC Project.
Li and Wang falsely assured investors that their $500,000 investments would guarantee them lawful permanent residence in the U.S. through the EB-5 investment visa program.
The two falsely represented the progress they were making on the project and its support from government officials by distributing promotional materials that contained photographs of Li with prominent U.S. politicians.
Li and Wang then siphoned off the money they received by transferring it through bank accounts held in the names of various companies that Li had created. They then used the funds to pay for personal expenses and political contributions.
The portion of the invested capital Li and Wang spent on the TEC Project was used to create and perpetuate the fiction that the TEC Project was a viable development project that was actually under construction.
The DOJ said more than 150 investors contributed at least $31.5 million to the project, including $16.5 million from EB-5 investors who were promised green cards in exchange for their investments, and $15 million from stock investors who were promised that an initial public offering would take place.
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, according to the Justice Department.
According to the initial complaint, Li and Wang also charged 12 foreign nationals $93,000 each for admission to a 2017 fundraising event with President Donald Trump.
Li and Wang used the funds they collected from the foreign nationals to make $600,000 in illegal political contributions in their names—$270,500 from Li and $329,500 from Wang—to the joint fundraising committee hosting the fundraiser, which were the largest contributions to the joint fundraising committee at the time.
The DOJ said the committee was unaware of the scheme.
Li is expected to be sentenced on Dec. 5 at the courthouse in Central Islip.
