Chinese-American Real Estate Executive Arrested for Allegedly Embezzling Thirty Million Dollars

New York City Prosecutor and the FBI announced on Thursday that Kevin Feng Gao, a senior executive of a real estate company related to the Shanghai government in China, was arrested for bank fraud. Gao is accused of embezzling $30 million in funds intended for Manhattan real estate investment by opening fake bank accounts.

The indictment alleges that Gao, in the name of a company called A managing a Manhattan real estate development project, unauthorizedly opened a bank account. Despite being just a senior executive of the joint development company for the real estate project, Gao falsely claimed authorization from the management company when applying for the account, providing a fake document instead of the actual operating agreement.

After the fraudulent account was successfully opened, an investment company poured $30 million into the real estate project. However, instead of going into the legitimate company account, the funds were transferred to Gao’s fraudulent account and further distributed to multiple accounts controlled by him and his accomplices.

Specifically, this involves a luxury residential development project in Midtown Manhattan, including an apartment building managed and developed jointly by two real estate companies from the United States and China: a real estate development company B located in Connecticut and the Shanghai government-related real estate company C where Gao is associated. B and C collectively operated the luxury project through various corporate entities, including a company A partly owned by B and C.

In February 2017, Gao and his co-conspirators applied for an unauthorized bank account at the Manhattan branch of an FDIC-insured bank without A company’s authorization, providing false statements during the application process. In June of the same year, an investment company invested $30 million in the luxury development project; however, unknowingly, the funds were diverted to Gao’s secretly controlled unauthorized account instead of A company’s official account.

According to the indictment, between June and October of the same year, Gao and his co-conspirators transferred the $30 million through multiple transactions to other bank accounts under their control, ultimately siphoning the funds originally meant for the luxury development project.

FBI Assistant Director James E. Dennehy stated, “Gao intercepted a substantial investment by establishing illicit bank accounts.” Federal prosecutor Danielle Sassoon of the Southern District of New York emphasized, “Such bank fraud seriously undermines the integrity of the financial system, underscoring the crucial work of the FBI and prosecutorial team in exposing this case.”

Gao, 37, hailing from Queens, New York, was arraigned in federal court in Manhattan yesterday after his arrest. He currently faces a charge of bank fraud that carries a maximum sentence of 30 years if convicted.