A New York-based businesswoman has been sentenced to nine years in federal prison for orchestrating a multimillion-dollar fraud scheme that targeted foreign investors and channelled illicit funds into US political campaigns. The case highlights the intersection of financial crime and campaign finance violations, raising concerns about vulnerabilities in political funding systems.
Sherry Xue Li, 54, was convicted after pleading guilty to conspiracy to commit money laundering and conspiracy to defraud the United States by undermining regulations enforced by the Federal Election Commission (FEC). In addition to her prison sentence, the court ordered her to forfeit $31.5 million in assets, including multiple properties, and to compensate victims who suffered substantial financial losses.
According to prosecutors, Li and her associate, Lianbo Wang—who received a separate five-year prison sentence—operated a long-running scheme that misled investors, many of them from China, into contributing large sums to a fictitious real estate development project. Investors were promised that their participation would help secure lawful permanent residency in the United States. Instead, authorities say the funds were diverted for personal use, including luxury goods, travel, housing and other high-end expenses.
Investigators also uncovered that part of the misappropriated money was used to gain access to US political circles. The defendants allegedly sold investors opportunities to attend high-profile political events, including a fundraising event during Donald Trump’s presidency, charging substantial fees for access. Prosecutors stated that these funds were then used to make illegal political donations, including approximately $600,000 in contributions linked to a 2017 fundraising event.
Authorities emphasized that the political campaigns and committees involved were not aware of the illegal origin of the funds and were not accused of wrongdoing. However, the case has drawn attention to how fraudulent schemes can exploit gaps in oversight to inject illicit money into political systems.
The investigation revealed that Li used images and perceived connections with political figures to lend credibility to the fraudulent project and attract further investment. Prosecutors described the scheme as a deliberate and sustained effort to deceive investors while profiting from their trust.
Officials stated that the sentencing reflects a broader commitment to combating financial crime, particularly where it intersects with political processes. The case underscores the risks posed by cross-border investment fraud and the need for robust safeguards to prevent the misuse of financial systems for both personal enrichment and illicit political influence.