COURT APPEARANCE REVEALS MORE INFO ABOUT 'THOMPSON EDUCATION CENTER' DEFENDANT'S SCHEME
PROSECUTOR: LI HAD MULTIPLE BANK ACCOUNTS & CONTACTS IN CHINA USED TO PERPETUATE FRAUD
Sherry Li speaking at a May 2013 in Monticello during her initial presentation about China City of America.
(screenshot from YouTube video)
Sherry Li in February 2019 at a Hollywood event related
to the Oscars (photo from press release)
BROOKLYN - A federal judge in Brooklyn has rejected a bail proposal by Sherry Li's attorney and ordered that the "Thompson Education Center' (TEC) defendant remain at the Metropolitan Detention Center here because she poses a "serious risk of flight."
"I would be hesitant to release Ms. Li on personal recognizance bond," said Magistrate Judge Ramon E. Reyes, Jr., according to a transcript of Li's initial court appearance on July 18. "I think this case needs sureties, financially responsible ones, who are not alleged to have benefitted from or engaged in the underlying conduct. So I'm going to deny Ms. Li's release, sign a permanent order of detention with leave to reopen and present a bail package in the future."
Li and business partner Lianbo "Mike" Wang - who for years cultivated close ties to many in Sullivan's political and business community and who had a Sullivan office at the same address as the Partnership for Economic Development - were arrested on July 18 at Li's home in Oyster Bay, Long Island.
A press release issued in September 2014 by Sherry Li shows her connections to leaders of the Sullivan business community.
The pair are accused of perpetuating a "massive, multi-layered" fraud scheme targeting foreign nationals ranging from a sham real estate investment, (TEC) promised benefits for payment, the solicitation for access to U.S. politicians, to making illegal donations for campaigns," according to the federal officials.
They each face three charges: wire fraud conspiracy, money laundering conspiracy and conspiracy to defraud the United States by obstructing the Federal Election Commission’s (FEC) administration of campaign finance laws. Conviction on all three charges alone could result in prison terms of 45 years, prosecutors say. "The staggering scope of this alleged fraud was facilitated by an abuse in the investor visa process,” Ricky J. Patel, Acting Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations (HSI), New York, said.
The criminal complaint against the pair was unsealed the same day that the Department of Justice announce their arrests in a detailed press release.
According to the complaint and news release, more than 150 investors - based mostly in China - were duped out of $27 million for the fictitious China City of America development that later became known as Thompson Education Center, set on some 575 acres in the Town of Thompson.
Thompson Education Center was "planned" for an area that included the Town of Thompson and the Town of Fallsburg.
Prosecutors allege that $16.5 million was taken from EB-5 investors who were promised a green card in return for their investment, and approximately $11 million from stock investors who were promised that an IPO (initial public offering) would take place.
In return, Li and Wang promised them investor visas so they could live in the U.S. - plus access to America's power brokers, including former President Donald Trump.
The DOJ press release stated: "Many foreign national victims were persuaded to invest in the TEC Project by, among other things, 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)."
Justice officials also allege that Li, Wang and other members of the conspiracy 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. (Most of those companies have a business address at the Oyster Bay residence).
"Once the funds were in those accounts, Li and Wang used the funds to pay for numerous personal expenses including clothing and accessories, jewelry, housing, vacation travel, upscale dining, and political contributions to prominent politicians," the press release said. "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."
Li's attorney - Nora Hirozawa - had proposed bail using Li's spacious Oyster Bay home as collateral. But the judge issued an order rejecting it.
The home owned by Li that she purchased in 2011 and where prosecutors say was a base of operations where she and Wang ran their fraudulent scheme.
Hirozawa also proposed that the bail be secured by Li's father, who was living with her at her Oyster Bay, Long Island home at the time of her arrest earlier this month.
But Josh Hafetz, the federal prosecutor leading the case, argued that Li's father had no income and was being supported by Li's fraudulent scheme. He added that the home in Oyster Bay was an ineligible asset since it was used in the commission of the alleged crimes committed by Li.
Court papers published online by federal prosecutors and obtained by The SullivanTimes (see below) reveal additional details about the case.
For example, at Li's first court appearance in Brooklyn on July 18, Hafetz told the judge that Li continues to maintain "very strong ties to the People's Republic of China," a country in which the United States does not have an extradition treaty. He added that Li would have "little difficulty" in obtaining travel documents that would allow her to return to her home country.
Justice officials allege that Li and Wang charged 12 foreign nationals $93,000 per person for admission to a June 28, 2017 fundraising event with Trump. 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," the DOJ said.
(Here's a link to a story from five years ago in USA today about the connection between Trump and Li/Wang).
Li and Wang later used a photograph of Li and Trump taken at the fundraiser to solicit investment in the TEC Project, according to DOJ. (Three years earlier, Li donated $55,000 to the re-election campaign of former New York State Governor Andrew Cuomo).
In 2019, Li also donated $1,500 to the campaign of Vicki Walsh, who was Li's most recent spokesperson for Thompson Education Center and who is currently a councilwoman of the Town of Oyster Bay Board. That donation was funneled through "Thompson B Management" one of Li's multiple companies she set up over the past decade and registered at her Oyster Bay home address. Walsh could not immediately be reached for comment on Thursday night.
News of the Li/Wang arrests came about a few years after the pair's "proposal" to build a massive college campus came to a grinding halt after Li and Wang could not get necessary approvals in multiple towns (Thompson, Mamakating and Fallsburg) to move forward. They did, however, get a green light from the Town of Fallsburg Zoning Board to construct a single family home that was later used to dupe overseas investors into believing the Thompson Education Center already received all necessary permits and that construction of the campus had begun. That was just one of many big lies put forward by Li and Wang, according to federal prosecutors, who said the pari would send zoomed in photos of the foundation of the Renner Road property to investor victims.
In Sullivan, most people who followed the project since it first was presented in 2013 knew that it stalled after the duo were unable to secure the necessary approvals from multiple town boards in Sullivan. The exception was that single permit granted by the Town of Fallsburg Zoning board for a "residence" on Renner Road that was called illegal by the attorney retained by the Basha Kill Area Association in a letter to former Town of Fallsburg Supervisor Steve Vegliante in 2017.
Allan Scott, the former county legislator and supervisor for the Town of Bethel and a a former CEO of the Partnership for Economic Development, acted as a consultant for Li and introduced her to the influencers in Sullivan County, including at her first public appearances before town boards.
Scott, reached at his White Lake home on Friday, declined comment when asked about the arrests. And, current Partnership CEO Marc Baez, was another big cheerleader of Li and the project, seeing it as a job creator.
Larry Behar, an immigration law attorney who leads a Florida-based law firm "focused on US immigration investor legal services" and who was part of Li's team, told The SullivanTimes on Friday that he was unaware of the arrests and that he had not spoken at all to Li in about a decade. He also said that he had not been contact by federal investigators about the investigation.
Court papers filed last week reveal, too, that the pair - as of October 2021 - were trying to offer TEC investors the chance to trade in their "shares" for a new investment in a blockchain company that the pair reportedly said they also owned.
The SullivanTimes on Friday afternoon left a voice message for Hirozawa seeking comment.
Below is an excerpt from a news release issued by Sherry Li in March 2020, at least two years after her project had not moved forward with any local town board:
"Thompson Education Center is a project that plans to create a high-end education community in Sullivan County, Town of Thompson, covering 575 acres.
Thompson Education Center would work with accredited colleges and will include a Business School, a School of Film & Arts as well as programs in the following industries: Nursing/Medical Training, Culinary Arts, High School Equivalency and Executive and Vocational Training and related ancillary facilities. After completion of Phase 1, the project will include 4 classroom buildings, student dormitories, student townhouses, and a student center.
Currently, Thompson Education Center has entered into agreements and signed letter of interests with high schools, colleges, education institutions and systems both in U.S. and China, each of them will provide a great number of students to the center. Also, TEC has already been working with several U.S. accredited colleges."
Below is a transcript of the July 18 appearance by Sherry Li in Brooklyn federal court
(DEVELOPING STORY)
Editor's Note: SullivanTimes Editor Rich Klein in early 2013 was briefly a public relations consultant to Sherry Li. He severed the relationship when Li refused to pay him any of the monies owed for his work. The relationship soured because Klein asked Li what projects she had built in the United States or anywhere in the world that he needed for press releases. Suzanne Loughlin, now the chair of the Sullivan County Industrial Development Agency, later took over communications for China City of America. Loughlin was later replaced as communications contact by Vicki Walsh, who is now a Town of Oyster Bay council member. Other locals who were part of Li's team at the outset included attorney Jacob Billig, who took Li to court for non-payment of fees.