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Arcadia Woman Arrested for Allegedly Swindling More Than $20M
Arcadia Weekly Jun 23, 2020
Photo by Terry Miller / Beacon Media News
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ASan Gabriel Valley woman was arrested Friday morning on a criminal complaintalleging she fraudulently solicited $21.6 million in funds for a condominiumand hotel complex in the Coachella Valley, then spent a significant portion ofher victims’ money on her own lavish living expenses, including luxury cars,travel, and designer clothing.
Ruixue“Serena” Shi, 36, of Arcadia, was taken into custody by special agents of theFBI. She has been charged with one count of wire fraud.
Accordingto an affidavit filed with the complaint filed last Wednesday and unsealedFriday, between November 2015 and July 2018, Shi solicited investments for theHyde Resorts and Residences Coachella Valley. Hyde Resorts was to be a 207-unitluxury condominium and hotel complex that was supposed to have a total of95,000 square feet of on-site conference facilities, a pool, spa, fitnesscenter and other amenities.
Shiwas the president and owner of Global House Buyer (GHB), a China-based real estatedevelopment company, and also was CEO of the Beverly Hills-based company HydeMorgan Development, LLC, the affidavit states. The Hyde complex was to bedeveloped by GHB while Hyde Morgan solicited investments.
Shicontacted prospective investors in the Hyde complex — who mostly were based inChina — through sales presentations she gave at hotels, radio advertisements,and through the solicitation of investments over forums on WeChat, a Chinesemessaging, social media, and mobile payment application, according to theaffidavit.
Amongthe false representations Shi allegedly made to her victims to induce them toinvest was that the Hyde development was scheduled to begin construction in2017. Investors were told they would be purchasing condos ranging in price from$400,000 to $700,000, according to the affidavit. Investors were required topay 40 percent of the total purchase price upfront as a down payment, but Shipromised that GHB would help them finance the remaining balance with loans fromU.S.-based banks when the project was completed.
Chineseinvestors in the Hyde project were falsely told that their investments with Shiwould enable them to obtain visas through the EB-5 Immigrant Investor Program,the affidavit states. EB-5 is a federal program that allows foreign investorsto secure a U.S. visa by investing a large sum of money to finance a businessin the United States that employs American workers. One victim told lawenforcement that Shi told her that Shi would procure a long-term visa for herthrough the EB-5 Program if she invested $500,000 in the Hyde project, theaffidavit states.
Shialso allegedly told investors that GHB had purchased a 47-acre lot of land inCoachella Valley where the Hyde development was to be built. In reality, Shipurchased only 20 acres of that property, the affidavit states. Shi alsofalsely told investors that GHB had obtained the required city developmentapprovals for the Hyde development, which included the re-zoning of the landshe purportedly had purchased, when no such approvals had been given.
Whensome victim-investors began demanding refunds after hearing GHB no longer wasin operation in the United States, Shi allegedly offered them partial refundsif they signed a contract purporting to prevent them from disclosing they hadreceived the refund. She also allegedly sent investors phony photographspurporting to be of construction that was underway. In truth, GHB never beganconstruction on the Hyde development and never purchased the entire plot ofland where the development was to be built, the affidavit states.
Bankrecords allegedly show that Shi transferred the victims’ funds to her personalaccounts and then misappropriated a significant portion of victims’ money forher own expenses. For example, she allegedly used $2.2 million of investormoney to pay a company that provided luxury travel and concierge services,nearly $295,000 to purchase two Mercedes-Benz automobiles, and hundreds ofthousands of dollars to buy clothes, restaurant meals, and hotel stays inBeverly Hills, France, Thailand and China.
Ifconvicted, Shi would face a statutory maximum sentence of 20 years in federalprison.
TheFBI investigated this matter.
Thiscase is being prosecuted by Assistant United States Attorney Alexander C.K.Wyman of the Major Frauds Section.
