A New York businesswoman has been sentenced to nine years in federal prison for orchestrating a massive financial scheme that defrauded foreign investors of over $30 million and illegally funneled portions of the stolen money into US political campaigns, including a fundraiser for former President Donald Trump during his first term.
Details of the Fraudulent Scheme
Sherry Xue Li, a 54-year-old resident of Oyster Bay, New York, was ordered to forfeit $31.5 million and property at three locations, and to make restitution to her victims. She pleaded guilty in July to charges of money laundering conspiracy and conspiracy to defraud the United States by obstructing the Federal Election Commission's administration of campaign finance laws. Li has been detained since her arrest in 2022.
Co-Defendant and Legal Proceedings
Her co-defendant, Lianbo Wang, also pleaded guilty to similar charges and received a five-year prison sentence. US attorney Joseph Nocella stated that Li "faces justice for her cynical schemes," adding that she "peddled false promises and outright lies to her many investors and stuffed her pockets while they suffered devastating losses." Li's lawyer did not immediately respond to a request for comment on Friday.
How the Scam Operated
Prosecutors revealed that Li and Wang, both naturalized US citizens, spent years convincing investors, many from China, to contribute $500,000 each to a fictitious development project. They falsely promised that this investment would guarantee lawful permanent resident status in the US. Instead, the duo used millions of dollars from these investments for personal expenses, including clothing, jewelry, housing, vacation travel, and upscale dining.
Illegal Political Contributions
Furthermore, Li and Wang sold investors access to US politicians and used the proceeds to make illegal contributions to US political campaigns and committees. In one notable instance, they charged investors $93,000 each for admission to a 2017 Trump fundraiser, then used the money to make illegal donations totaling $600,000 to the committee hosting the event. Li even took a photograph with Trump and his wife, Melania, at the event and used the image to solicit donations to the fake development project.
Impact and Aftermath
Prosecutors emphasized that the campaigns and committees involved were unaware of the scheme, and no allegations of criminal wrongdoing were lodged against them. The case highlights significant vulnerabilities in campaign finance regulations and the exploitation of foreign investors seeking US residency. The sentencing marks a major conclusion to a complex investigation into political finance fraud, underscoring the severe consequences for such deceptive practices in the financial and political arenas.
