The feds arrested Ruixue “Serena” Shi, 36, lleging she fraudulently solicited $21.6 million in funds for a condominium and hotel complex in the Coachella Valley, then spent a significant portion of her victims’ money on her own lavish living expenses, including luxury cars, travel, and designer clothing.She faces one count of wire fraud.
Here’s what they say she did: Between November 2015 and July 2018, Shi solicited investments for the Hyde Resorts and Residences Coachella Valley. Hyde Resorts was to be a 207-unit luxury condominium and hotel complex that was supposed to have a total of 95,000 square feet of on-site conference facilities, a pool, spa, fitness center and other amenities.Shi was the president and owner of Global House Buyer (GHB), a China-based real estate development company, and also was CEO of the Beverly Hills-based company Hyde Morgan Development, LLC, the affidavit states. The Hyde complex was to be developed by GHB while Hyde Morgan solicited investments.
Shi contacted prospective investors in the Hyde complex – who mostly were based in China – through sales presentations she gave at hotels, radio advertisements, and through the solicitation of investments over forums on WeChat, a Chinese messaging, social media, and mobile payment application. She told the prospective investors that the Hyde development supposed to start construction in 2017. Investors were told they would be purchasing condos ranging in price from $400,000 to $700,000. Investors had to pay 40 percent of the total purchase price upfront as a down payment, but Shi promised that GHB would help them finance the remaining balance with loans from U.S.-based banks when the project was completed.
Chinese investors in the Hyde project were falsely told that their investments with Shi would enable them to obtain visas through the EB-5 Immigrant Investor Program. EB-5 is a federal program that 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. One accuser said Shi told her that Shi would procure a long-term visa for her through the EB-5 Program if she invested $500,000 in the Hyde project, the affidavit states.
Shi also allegedly told investors that GHB had purchased a 47-acre lot of land in Coachella Valley where the Hyde development was to be built. In reality, Shi purchased only 20 acres of that property. Shi allegedly told investors that GHB had the required city development approvals for the Hyde development, which included the re-zoning of the land she purportedly had purchased, when no such approvals had been given.
When some investors began demanding refunds after hearing GHB no longer was in operation in the United States, Shi allegedly offered them partial refunds if they signed a contract purporting to prevent them from disclosing they had received the refund. She also allegedly sent investors phony photographs purporting to be of construction that was underway. In truth, GHB never began construction on the Hyde development and never purchased the entire plot of land where the development was to be built.
Bank records allegedly show that Shi transferred the victims’ funds to her personal accounts and then misappropriated a significant portion of victims’ money for her own expenses. For example, she allegedly used $2.2 million of investor money to pay a company that provided luxury travel and concierge services, nearly $295,000 to purchase two Mercedes-Benz automobiles, and hundreds of thousands of dollars to buy clothes, restaurant meals, and hotel stays in Beverly Hills, France, Thailand and China.