New York Businesswoman Sentenced for $30 Million Fraud Scheme

CENTRAL ISLIP, N.Y. (AP) — A New York entrepreneur, Sherry Xue Li, was sentenced on Friday to nine years in federal prison for orchestrating a financial scheme that defrauded foreign investors out of more than $30 million. The fraudulent activities included funneling a portion of the embezzled funds into U.S. political campaigns, notably a fundraiser for President Donald Trump.

Financial Penalties and Restitution

In addition to her prison sentence, Li was ordered to forfeit $31.5 million in assets, including properties at three locations. She is also required to make restitution payments to her victims, further highlighting the severe consequences of her actions.

Details of the Fraudulent Scheme

The 54-year-old Oyster Bay resident has been incarcerated since her arrest in 2022. Li pleaded guilty last year to charges of money laundering conspiracy and conspiracy to defraud the U.S. by obstructing the Federal Election Commission’s oversight of campaign finance laws. Her co-defendant, Lianbo Wang, who also faced similar charges, was sentenced to five years in prison.

False Promises to Investors

According to prosecutors, Li and Wang deceitfully marketed a fictitious development project to investors—many of whom were from China—promising each $500,000 investment would ensure lawful permanent resident status in the U.S. However, instead of utilizing the funds for the promised project, they diverted millions for personal expenses, including luxury items, housing, and travel.

Illegal Political Contributions

Li and Wang not only misused investors’ contributions for personal gain, but they also claimed to provide access to U.S. politicians. Prosecutors revealed that they made illegal donations to U.S. political campaigns, including charging investors $93,000 each for entry to a 2017 Trump fundraiser, which resulted in $600,000 in illegal contributions to the event’s committee.

Exploiting Political Connections

Li capitalized on her access to political figures by even taking a photograph with Trump and his wife, Melania, at the fundraiser. She later used this image to solicit additional donations for her fictitious development project, showcasing the manipulative tactics employed in this elaborate scheme.

Justice Served

U.S. Attorney Joseph Nocella emphasized the importance of justice in this case, stating, “She faced justice for her cynical schemes.” He criticized Li for “peddling false promises and outright lies” while allowing her investors to suffer substantial losses. The campaigns and committees involved were reportedly unaware of Li’s fraudulent activities, and no allegations of wrongdoing have been directed towards them.

Conclusion

The case serves as a stark reminder of the potential for financial crimes in the realm of investments and political fundraising. As authorities continue to clamp down on such schemes, it is crucial for investors to remain vigilant and conduct thorough due diligence before committing their funds.