An Arcadia woman pleaded guilty Tuesday to a federal criminal charge for overseeing a scheme in which she misappropriated nearly $23 million in funds intended for a hotel and condominium complex in the Coachella Valley.
Ruixue “Serena” Shi, 37, pleaded guilty to one count of wire fraud, according to a news release from the U.S. Attorney’s Office for the Central District of California. Shi has been in federal custody since August 2020.
From November 2015 to July 2018, Shi was the general manager of Global House Buyer LLC, a China-based real estate company with an office in Los Angeles. She identified approximately 47 acres of land in Coachella to build Hyde Resorts and Residences Coachella Valley, according to her plea agreement obtained by the U.S. Attorney’s Office.
Shi contacted representatives of Dakota Development, a real estate development subsidiary of L.A.-based lifestyle hospitality company SBE Entertainment, about using their luxury hotel and nightlife brand, “Hyde.” Through the discussions, Shi reached an agreement with Dakota Development that the Hyde Development would be developed under SBE’s brand name “Hyde,” the news release states.
Hyde Resorts was supposed to be a 207-unit luxury condominium and hotel complex with 95,000 square feet of conference facilities, a pool, spa, fitness center, among other amenities.
Shi then solicited investments for the Hyde complex from victims, the majority of whom were Chinese investors, by giving sales presentations at hotels and contacting victims over WeChat, a Chinese messaging, social media and mobile payment application.
To convince victims to invest in the complex, Shi made false and fraudulent statements to them, claiming that their money would only be used to fund the development project, according to the U.S. Attorney’s Office.
“Relying on Shi’s false and fraudulent statements, victims wired money to her, mostly from China,” the news release states.
In one instance, in October 2016, a victim wired $50,000 from a bank account in China to an account controlled by Shi in L.A.
In total, approximately $22,833,441 was transferred from bank accounts in China to accounts controlled by Shi, officials said.
After she received the victims’ money, Shi spent nearly $300,000 on two luxury cars; approximately $2.2 million at a company that provided luxury travel and concierge services; and admitted to spending almost $800,000 in victim funds at a full-service styling agency in Beverly Hills, as well as hundreds of thousands of dollars of victims’ money on high-end clothing designers, restaurants and other stores.
A sentencing hearing is schedule for March 28, 2022, at which time Shi will face a statutory maximum sentence of 20 years in federal prison.