Oyster Bay woman pleads guilty to $31.5M campaign-contribution scam
Oyster Bay resident Sherry Xue Li, left, with President Donald Trump and first lady Melania Trump at a 2017 political fundraiser in Washington, D.C. Credit: USEDNY
An Oyster Bay woman accused of "selling access to the democratic process" by pocketing with a partner more than $30 million in exchange for legal residency, access to President Donald Trump and other politicians, or the belief a phony company would go public, pleaded guilty Wednesday to her role in the scheme, federal prosecutors said.
Some of the unwitting foreign investors, many from the People's Republic of China, were promised permanent status in the United States if they invested $500,000 each in an upstate development, called the Thompson Education Center, also referred to by prosecutors as TEC. The development didn't exist, prosecutors said.
As part of her plea in Central Islip federal court to money laundering and conspiracy charges, Sherry Xue Li, 53, agreed to turn over $31.5 million she and a business associate collected in the fundraising scheme, according to a news release by the office the U.S. attorney for the Eastern District of New York, Joseph Nocella.
Li and her associate, Lianbo Wang, 48, also of Oyster Bay, were charged in 2022 with fraudulently soliciting the campaign contributions from more than 150 investors for nearly a decade, prosecutors said.
Wang pleaded guilty in November to unlawful monetary transactions and conspiracy to defraud the United States. He was sentenced to 5 years in prison.
Other investors handed over their money with the belief that the fictitious development would soon be a publicly traded company.
In reality, Li and Wang "transferred the funds through bank accounts held in the names of various companies that Li had created," the release states. They then used the investors' money for clothing, jewelry, housing and other personal expenses along with political contributions.
"Li defrauded more than 150 victims in the United States and abroad through years of lies and deception and sought to profit by selling access to the democratic process," Nocella said in a statement. "In doing so, she attempted to corrupt a fundamental institution in this country — fair and transparent elections free from unlawful foreign influence."
Prosecutors said Li and Wang also acted as "'straw donors' for foreign nationals to illegally contribute to campaigns supporting U.S. politicians and committees."
The two would charge the foreign donors for access to Trump and other politicians and use the payments, falsely identified as from U.S. citizens, to make political contributions, a violation of federal election campaign law.
Li and Wang charged a dozen foreign nationals $93,000 access for a June 28, 2017, fundraiser during Trump’s first term, prosecutors said. They then made $600,000 in contributions in their own names to the fundraising committee, according to prosecutors. They were listed as the largest contributors to the committee at the time.
Li and Wang brought the foreign national guests to the fundraiser and posed for pictures with Trump, "the then-President of the United States," prosecutors said.
The White House did not respond Wednesday to an inquiry regarding the guilty plea.
The joint fundraising committee was unaware of the illegal donations and was not charged with any wrongdoing, federal prosecutors said in the release, which did not name the committee.
"In some cases, Li and Wang used investment funds to make the political contributions, which they used to gain access to the political events, where Li and Wang took photographs with elected officials," according to the U.S. attorney’s office. "Li and Wang would then use the photographs as a marketing tool in soliciting investments from foreign nationals in the TEC Project."
Prosecutors said a brochure was also sent with photos of Li and Wang and several elected officials, including then-New York Gov. Andrew M. Cuomo with the caption: "The project has received the governor's strong support," Newsday previously reported.
A Cuomo representative had no comment Wednesday.
The education center solicited at least $31.5 million in donations, including about $16.5 million from foreign investors who were promised green cards, and about $15 million from stock investors who were promised an initial public offering, prosecutors said.
No temporary or permanent immigration status was ever given to foreign investors and the stock never went public, officials said.
Li could face up to 20 years in prison when she is sentenced Dec. 5.
Newsday's Nicole Fuller contributed to this report.
John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.
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