A Long Island woman has pleaded guilty to charges related to a large-scale investment fraud and campaign finance scheme following an investigation by Homeland Security Investigations (HSI) New York, part of U.S. Immigration and Customs Enforcement (ICE). Sherry Xue Li, 53, admitted in federal court on July 30 to money laundering conspiracy and conspiracy to defraud the United States by obstructing the Federal Election Commission’s administration of campaign finance laws.
According to prosecutors, Li and her co-defendant Lianbo Wang orchestrated a scheme over nearly ten years that collected more than $30 million from investors for a fictitious development project known as the Thompson Education Center in Sullivan County, New York. Many victims were foreign nationals from China who were told their investments would secure them lawful permanent resident status in the United States through the EB-5 visa program managed by the Department of Homeland Security.
Li and Wang also sold access to U.S. politicians at fundraising events by collecting funds from foreign nationals and making unlawful contributions to political campaigns using those funds. The pair misrepresented their progress on the project, distributed promotional materials with photographs of Li alongside prominent politicians, and used investor money for personal expenses such as clothing, jewelry, housing, travel, dining, and political donations.
“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 Ricky J. Patel.
Patel announced the plea with Joseph Nocella Jr., U.S. Attorney for the Eastern District of New York; Christopher G. Raia, FBI New York Assistant Director in Charge; and Harry T. Chavis Jr., IRS Criminal Investigation Special Agent in Charge.
More than 150 investors put at least $31.5 million into the project—$16.5 million from EB-5 investors seeking green cards and about $15 million from stock investors expecting an initial public offering. None received green cards or saw an IPO take place.
Li and Wang acted as “straw donors” for foreign nationals wanting access to U.S. political events or officials for a fee. They used these funds for political contributions under false names, violating federal election law. In one instance described by prosecutors, twelve foreign nationals paid $93,000 each for entry into a June 2017 fundraiser with then-president Donald Trump; Li and Wang contributed $600,000 total in their own names using these funds.
“Li defrauded more than 150 victims in the U.S. and abroad through years of lies and deception and sought to profit by selling access to the democratic process,” said 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,” said 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 U.S. for personal gain.”
“Li’s victims thought that they were investing in the American dream, but instead were left in a nightmare of fraud and deceit,” said 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.”
As part of her plea agreement, Li agreed to forfeit $31.5 million along with property at three locations; she faces up to 20 years imprisonment when sentenced.
Her co-defendant Wang previously pleaded guilty last year on related charges including unlawful monetary transactions and was sentenced to five years in prison.