CALIFORNIA — Ruixue “Serena” Shi, 36, of Arcadia, was arrested on Friday morning, June 19, by FBI special agents. She has been charged with one count of wire fraud.
A criminal complaint alleges Shi fraudulently solicited $21.6 million in funds for a condominium and hotel complex in the Coachella Valley, according to a June 19 press release from the U.S Attorney’s Office Central District of California.
Assistant United States Attorney Alexander C.K. Wyman is prosecuting the case. Shi could face a statutory maximum sentence of 20 years in federal prison if convicted.
According to an affidavit, Shi is CEO of a Beverly Hills–based company called Hyde Morgan Development, LLC. She is also president of Global House Buyer (GHB), a China–based real estate development company.
Between November 2015 and July 2018, Shi solicited investments for the Hyde Resorts and Residences Coachella Valley. GHB was to develop the Hyde complex, and Hyde Morgan would solicit investors.
Prospective investors for the complex were mostly based in China, according to the affidavit. Shi contacted potential investors through sales presentations at hotels, radio commercials, and solicitation of investments over forums on WeChat, a Chinese messaging, social media, and mobile payment application, according to the affidavit.
Shi told investors that their investments would enable them to apply for an investment through the EB-5 Immigrant Investor Program. This federal program allows foreign investors to secure a U.S. visa by investing a large sum of money to finance a business in the United States that employs American workers.
According to the affidavit, Shi falsely told investors that construction of the Hyde complex would begin in 2017 in order to induce them. She also told investors that GHB had purchased a 47-acre land in Coachella Valley where the Hyde development was to be built. Instead, Shi had purchased 20 acres, according to the affidavit.
Shi falsely claimed that city development approvals had been given to the project, the affidavit says.
Shi told investors that they would be purchasing condos ranging in price from $400,000 to $700,000. Investors were required to pay 40 percent of the total purchase as a down payment; Shi promised GHB would help them finance the rest with land from U.S.–based banks once the project was completed.
Shi allegedly misappropriated a significant portion of victims’ money for her own expenses, according to bank records. She would allegedly spend the money on luxury cars, travel, and designer clothing.