The U.S. Attorney’s Office for the Southern District of New York has announced that a Chinese expatriate has been arrested in connection with a massive fraud scheme. The man is accused of bilking his hundreds of thousands of online followers out of more than $1 billion. He faces 12 counts of wire fraud, conspiracy to commit wire fraud, securities fraud and money laundering. The maximum custodial sentence for all of the counts is 215 years.
According to federal prosecutors, the man began to defraud his online audience about two years after he fled China and took up residence in New York City. He is said to have purported to be a Chinese billionaire who was organizing a movement to oppose the Chinese Communist Party. U.S. attorneys say he formed two nonprofit groups to back up his story, which helped him to develop a large social media following. He is alleged to have then used his influence over his followers to further fraudulent schemes involving farm loans, an online membership program and cryptocurrency investment.
Court document reveal that the man used the money he earned from wire and securities fraud to fund a lavish lifestyle. Prosecutors say the man bought a New York City penthouse, a New Jersey mansion, Ferrari and Lamborghini automobiles and a luxury yacht. A dual citizen of the United Kingdom and Hong Kong who authorities believe was one of the man’s co-conspirators remains at large.
Plea deal likely
Arrests are rarely made in major federal fraud investigations until a great deal of evidence has been gathered, which suggests that a plea deal is likely in this case. The charges this man faces could send him to prison for the rest of his life, but he will probably receive far more lenient treatment in return for pleading guilty.