Naturalized citizens charged in fraudulent investment scheme peddling political clout

Two naturalized American citizens were arrested and federally charged earlier this week for their involvement in a fraudulent scheme to — among other things — sell foreign nationals access to political events, including one at which former President Donald Trump appeared, as The Hill reports.

According to a Department of Justice press release, the defendants, Sherry Xue Li and Lianbo Wang, are accused of money laundering conspiracy, wire fraud conspiracy, conspiracy to defraud the United States, as well as of obstruction of Federal Election Commission (FEC) regulations.

In the criminal complaint against the pair, it is alleged that they masterminded a nearly ten-year scheme to bilk investors by touting a fictitious development project involving an educational enterprise referred to as the “Thompson Education Center” (TEC) in New York.

The duo sought investors – many of whom were foreign nationals not living inside the U.S., by making false representations about the project’s projects and about the supposed support it had garnered from powerful American officials.

In order to secure a consistent flow of financial donations, the defendants allegedly promised “green cards, access to political figures, and dividends” on the sums contributed to the illusory project, and they ultimately succeeded in bringing in tens of millions of dollars.

Those funds, according to prosecutors, were siphoned off by Li, Wang, and others, and were used to pay for personal expenses of various descriptions as well as for political contributions to well-known politicians.

Li and Wang are also accused of acting as “straw donors” for foreign nationals to skirt FEC prohibitions against contributions to American political campaigns and politicians from abroad, using contributed funds to themselves access high-profile political events at which they were photographed with prominent elected officials.

As the DOJ noted, Li and Wang employed this tactic to raise $600,000 from 12 foreign nationals and ultimately gain entry to a June 28, 2017 fundraiser with then-President Donald Trump, securing photographs with the commander in chief that were later used to generate additional investments in the fraudulent TEC endeavor.

The defendants, whom U.S. Attorney Breon Peace referred to as “predatory fraudsters,” were slated to make their initial court appearance in the case in Brooklyn on Monday, and only time will tell whether the government has sufficient evidence to obtain convictions and to send a strong message of deterrence to others who might contemplate similarly egregious breaches of the law.