US Department of Justice Charges Chinese Executive with Defrauding $30 Million

The U.S. Department of Justice announced on Thursday the arrest of Kevin Feng Gao, a senior executive at a real estate company, on charges of bank fraud and stealing $30 million for investment in Manhattan real estate. Today, he appeared in federal court in New York City.

New York Southern District Attorney Danielle Sassoon stated, “As alleged, Gao orchestrated a sophisticated scheme, creating a fraudulent, unauthorized bank account and using it to steal $30 million from a real estate investor. His bank fraud scheme undermines the integrity of our financial system.”

James E. Dennehy, Assistant Director of the FBI’s New York Field Office, said, “Gao is suspected of opening an unauthorized company bank account to divert and steal $30 million of investment. He misappropriated substantial funds from this illicit bank account he allegedly established, diverting it from its intended purpose. The FBI will continue to apprehend individuals who deceitfully steal what does not belong to them.”

According to the indictment, Gao executed a fraudulent scheme by opening a bank account in the name of a Manhattan real estate development project management company without authorization. He was an executive of another company involved in the joint development of the real estate project. Gao opened the account in his name without authorization from the management company, making it a “fraudulent account.”

When applying for the “fraudulent account,” he made false statements to FDIC bank employees claiming he was opening the account under the management company’s authorization. When asked to provide a copy of the management company’s operating agreement, Gao provided a false document instead of the actual operating agreement.

After opening the fraudulent account, an investment firm agreed to invest $30 million in the real estate development project of the management company. The company transferred the $30 million to Gao’s fraudulent account instead of the legitimate account held and controlled by the management company. Gao then dispersed the $30 million to several accounts under his and his accomplices’ control.

Gao, 37 years old and from Queens, New York, is charged with one count of bank fraud, which carries a maximum sentence of 30 years in prison. The maximum sentence in this case will be determined by Congress.

This case highlights the serious consequences of financial fraud and underscores the commitment of law enforcement authorities to hold accountable those who engage in deceptive practices that harm the financial system and investors.