Source: US FBI
Earlier today, at the federal courthouse in Central Islip, Sherry Xue Li pleaded guilty to money laundering conspiracy and conspiracy to defraud the United States by obstructing the Federal Election Commission’s (FEC’s) administration of campaign finance laws. Li orchestrated a nearly decade-long scheme to defraud investors in a fictitious development project out of more than $30 million. As part of the scheme, Li and her co-defendant Lianbo Wang falsely promised those investors that their investments would guarantee them lawful permanent resident status in the United States. Li and Wang also sold foreign investors access to U.S. politicians at fundraisers by collecting foreign-sourced funds from them and unlawfully contributing those funds to U.S. political campaigns and committees. When sentenced, Li faces up to 20 years in prison. As part of her plea agreement, Li agreed to forfeit $31.5 million, as well as property at three locations. In 2024, Wang pleaded guilty to engaging in unlawful monetary transactions and conspiracy to defraud the United States, and was sentenced to 60 months’ imprisonment.
Joseph Nocella, Jr., United States Attorney for the Eastern District of New York; Christopher G. Raia, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); Ricky J. Patel, Special Agent in Charge, Homeland Security Investigations, New York (HSI New York); and Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI New York) announced the guilty plea.
“Li defrauded more than 150 victims in the United States and abroad through years of lies and deception and sought to profit by selling access to the democratic process,” stated United States Attorney Nocella. “In doing so, she attempted to corrupt a fundamental institution in this country—fair and transparent elections free from unlawful foreign influence. Our Office is committed to investigating and prosecuting predatory fraudsters who steal victims’ hard-earned money.”
“Sherry Li admitted to her role in a long running fraud, profiting off of the exploitation of our nation’s political and immigration system,” stated FBI Assistant Director in Charge Raia. “Li’s corrupt scheme may have led to initial profits but ultimately will result in the loss of her freedom. The FBI will continue to investigate and hold accountable any malicious actor attempting to manipulate the electoral or immigration process of the United States for personal gain.”
“Sherry Li’s guilty plea today demonstrates HSI New York’s commitment to dismantling transnational schemes that try to exploit our immigration and financial laws. Irrespective of the deceitful, and oftentimes creative methodologies that fraudsters pose to unwitting victims, we will ensure they do not take advantage of our laws that are made to protect individuals and entities from swindlers,” stated HSI New York Special Agent in Charge Patel.
“Li’s victims thought that they were investing in the American dream, but instead were left in a nightmare of fraud and deceit,” stated IRS-CI Special Agent in Charge Chavis. “While she pocketed the money and traveled on lavish vacations, not one EB-5 or stock investor received what they were promised in return for their backing. Now, with today’s plea, she will finally move forward in facing the consequences of her selfish acts,” said Harry T. Chavis, Jr., Special Agent in Charge of IRS-CI New York.”
The Scheme to Defraud Investors
Li and Wang defrauded investors in a fictitious development project in Sullivan County, New York called the Thompson Education Center (TEC) (the TEC Project) out of more than $30 million. Many of the victims were foreign nationals located in the People’s Republic of China (PRC) who were persuaded to invest in the project by 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 administered by the Department of Homeland Security, U.S. Citizenship and Immigration Services (USCIS). The defendants falsely represented the progress they were making on the project and its support from government officials. The defendants distributed promotional materials that contained photographs of Li with prominent U.S. politicians to falsely convey government support for the project.
Li and Wang siphoned off the money they fraudulently obtained from investors by transferring the funds through bank accounts held in the names of various companies that Li had created. Once the funds were in those accounts, Li and Wang used the funds to pay for personal expenses including clothing, jewelry, housing, vacation travel, upscale dining, and political contributions to prominent politicians. The portion of the invested capital Li and Wang actually spent on the TEC Project was used merely to create and perpetuate the fiction that the TEC Project was a viable development project that was actually under construction. For example, Li and Wang hired contractors, engineers, and other professionals to create architectural drawings and plans and perform minor work on or around the development site, which Li and Wang showed to potential investors to mislead them into believing the TEC Project had a realistic probability of completion and of delivering the returns on investment that the co-conspirators promised their investors.
Ultimately, more than 150 investors invested at least $31.5 million in the TEC Project, including approximately $16.5 million from EB-5 investors who were promised green cards in return for their investments, and approximately $15 million from stock investors who were promised that an initial public offering (IPO) 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.
Selling Access to U.S. Politicians
In furtherance of their scheme, Li and Wang also acted as “straw donors” for foreign nationals to unlawfully contribute to campaigns supporting U.S. politicians and political committees. Li and Wang promised foreign nationals access to U.S. political events and politicians in exchange for a fee. Li and Wang used the money they received from foreign nationals to fund political contributions, and falsely identified themselves and other U.S. citizens as the contributors of the funds, in violation of the Federal Election Campaign Act (FECA) and FEC regulations. In some cases, Li and Wang used TEC investors’ investment funds to make the political contributions which they used to gain access to the political events, where Li and Wang took photographs with elected officials. Li and Wang would then use the photographs as a marketing tool in soliciting investments from foreign nationals in the TEC Project.
For example, as alleged in the complaint, Li and Wang charged 12 foreign nationals $93,000 per person for admission to a June 28, 2017 fundraising event (the June 28, 2017 Fundraiser) with the then-President of the United States. 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 the joint fundraising committee hosting the June 28, 2017 Fundraiser. At the time they made these contributions, they were the largest contributors to the joint fundraising committee, which was unaware of the charged schemes. Li, Wang, and their foreign national guests attended the June 28, 2017 Fundraiser and took photographs with the then-President of the United States. Li and Wang later used a photograph of Li and the President taken at the June 28, 2017 Fundraiser to solicit investments in the TEC Project.
The government’s case is being handled by the Office’s National Security and Cybercrime and Public Integrity Sections. Assistant United States Attorneys Andrew D. Reich and Meredith A. Arfa are in charge of the prosecution, with assistance from Paralegal Specialists Magdalena St. Surin and Rebecca Roth. Assistant United States Attorney Claire S. Kedeshian of the Office’s Asset Recovery Section is handling forfeiture matters.
The Defendant:
SHERRY XUE LI
Age: 53
Oyster Bay, New York
The Defendant Who Previously Pleaded Guilty:
LIANBO WANG
Age: 48
Oyster Bay, New York
E.D.N.Y. Docket No. 22-CR-484 (GRB)