By Paul Gable
Investigation into the lawsuit filed in the 15th Judicial Circuit by Nick Dou against Dan Liu and three Chinese corporations over properties held collectively by Founders Group International continues to bring new revelations to the surface.
According to a source familiar with the lawsuit, Dan Liu was served locally with the lawsuit in recent days.
Liu’s peer to peer lending company, which did business in the Peoples Republic of China (PRC) under both its Mandarin name “Yiqian Funding” and its English name “Easy Richness”, raised the money that was used to buy golf courses and other property in Horry and Georgetown counties.
According to records in Horry County, Liu and Dou established approximately 16 limited liability corporations to hold the various properties purchased in Horry and Georgetown counties. Collectively, the llc’s are known locally as Founders Group International.
According to court documents, Dou holds 10 percent interest in Founders Group International and the associated llc’s. The three Chinese corporations, for which Liu acts as exclusive U.S. agent, hold the remaining 90 percent of the llc’s.
According to sources familiar with Yiqian Funding, the company raised a total of approximately 10 billion Yuan ($1.5 billion) from approximately 60,000 investors over a six year period. Estimates are that at least $300 million was taken out of the PRC for investment in the U.S.
Sources with knowledge of Yiqian said what was purchased was not really important to Liu. His main goal was getting the money beyond the borders of the PRC.
For that purpose, Liu established the three Chinese corporations, apparently nothing more than shell corporations, to receive the investor money from Yiqian Funding to use for purchases in the U.S.
The 22 golf courses and other development properties owned by Founders Group International were, reportedly, purchased with cash obtained from Chinese investors with Yiqian and passed through the shell corporations, from 2014-2016.
According to a press release from the Nanjing District Attorney of Jiangsu Province of the PRC, persons listed as officers of the three Chinese shell corporations have been arrested in the PRC and Liu is wanted for arrest. The charge is investment fraud.
Yiqian Funding was raided by Chinese authorities in March 2016 and was listed in the LexisNexis April 2016 Ponzi Scheme Roundup. According to sources familiar with the case, the 60,000 Chinese investors have lost all their money.
Liu and Dou challenged reports of the raid on Yiqian Funding in local media and that the Founders Group International would face problems as a result. Dou went as far as to call the local reports “bull—-.”
Far from being bull—-, you can see pictures of Chinese authorities raiding a Yiqian Funding office by clicking on the two links at the end of this story.
According to Horry County records, beginning in early 2017, those same properties, for no apparent reason, signed promissory notes with a total debt approaching $150 million. In a series of assignment transactions, Liu has wound up holding all of that debt in his name.
Courses and development properties with no debt at the end of 2016 now owe Liu a total amount of nearly $150 million.
There was no apparent transfer of money from Liu to those llc’s except for the $5 and other considerations mentioned in each note. Why those corporations signed promissory notes in such large amounts is one of the big questions that will be asked as the lawsuit moves forward.
Links to Yiqian raid pictures appear below: (The pictures were taken in the PRC, sent electronically to a source in the U.S. and provided to Grand Strand Daily)
The top link shows a Chinese policeman carrying computer equipment out of a Yiqian Funding office. The English name of the company, “Easy Richness”, is easily seen at the bottom left corner of the sign.
The bottom link shows massed Chinese security officers blocking access to a Yiqian Funding office.