Dan Liu, a partner in the China-based company Founders Group International that has purchased 22 golf courses and multiple other businesses and properties on the Grand Strand, says reports in Chinese publications of alleged fraud in a Chinese company he is affiliated with are erroneous.
He blames competing groups with creating the false accusations against Yiqian Funding, and also says the Chinese lending company is not involved in any Grand Strand properties owned by FGI or affiliated companies, so there is no cause for concern over their operation and health.
According to differing allegations in multiple publications, Yiqian is under suspicion of running a Ponzi Scheme, money laundering, establishing shell companies in the U.S., falsifying company records, internet fraud and defrauding investors by transferring money to a U.S. branch company that purchased golf courses, hotels, mansions and yachts, and then re-sold the purchases back to investors at inflated prices.
“We didn’t do any illegal things,” Liu said. “If we were doing illegal things they would close the company [headquarters] in Nanjing and all of the branches must be closed.”
Liu said all of the approximate 300 Yiqian branch offices are operating normally, with one exception.
“I’ve been a businessman for 20 years and I haven’t hurt anybody. I’ve been honest,” Liu said.
The accusations have appeared in publications and websites including the internet finance website Eastmoney.com, the China Business Journal, World Journal of New York, the Bowen Press online news magazine and Epoch Times, which claims on its website to be the world’s biggest Chinese and multiple languages publication and internet media outlet with offices in 35 countries.
Liu also clarified his affiliation with Yiqian Funding, which does business in China under both its Mandarin name and the English name “Easy Richness.” Though he has repeatedly been referred to as the president or owner in published reports, he said he has been solely a paid adviser since the company was founded in 2010.
Liu said he was a co-founder in 2009 of Jiang Su Tian Rui, a foreign trade and investment company that has just one other wealthy partner and has been the source of the FGI purchases. Liu is listed as the company’s legal representative on 2009 incorporation papers, according to Chinese government online records.
He said the two Chinese companies have no connection other than his involvement in both, and he said Jiang Su Tian Rui has not been accused of wrongdoing. The Sun News was unable to find any direct published accusations against Jiang Su Tian Rui.
Liu declined to divulge the source of his money prior to joining Yiqian and founding Jiang Su Tian Rui, or the source of wealth for his partner in Jiang Su Tian Rui.
Liu said there are individuals and groups in both the U.S. and China who are trying to damage his companies with lies and rumors.
He said the U.S. group consists of a few people from New York and Myrtle Beach who wanted to become part of the Founders Group but were shut out. In China, Liu said he believes people from a competing business or businesses are perpetrating the fabrications, and someone recently attempted to blackmail Yiqian.
“Our company and me are a casualty of the two groups’ lies,” Liu said.
Liu said someone was posting negative lies about the company on a website about three weeks ago, and when company officials asked why the lies were being posted, they received a request for 2 million Yuan Renminbi – approximately $300,000 in the United States – to stop spreading the falsehoods. Liu said he knows companies in China that regularly pay extortionists, but Yiqian refused to pay. “We didn’t give the money to him,” Liu said. “If we give it to him he will ask for more money.”
Liu said blackmail is fairly common in China. “There are so many illegal things going on in China and there are not enough policemen to catch them all,” Liu said.
Though an Epoch Times report had more than one Yiqian Funding branch office being inspected and closed, Liu said it was just the one office in the Shaoxing area of the Zhejiang province that was inspected and was closed for 11 days as of Wednesday.
He said computers and some paperwork were seized by police, and some employees were taken for questioning.
“This situation now happening is only the small branch, it’s one of the 300 branches,” Liu said. “If something’s wrong, a small problem, it’s happening there and isn’t affecting the whole company.”
Yiqian is a peer-to-peer lending business. P2P companies provide money to borrowers but don’t fund the loans directly. They are instead an intermediary between the lender and either individual or institutional investors such as hedge funds and investment banks, and connect the two online.
The third-party investors take on the loan risk, not the P2P companies, though borrowers only interact with the P2P companies for acquisition and repayment of the loan.
Possible fraud in P2P businesses has been a recent focus of Chinese authorities.
“I think most people don’t know the law of P2P,” Liu said. “Most people misunderstand P2P. The government now watches P2P but it has never stopped it.”
Liu said he believes authorities were attracted to the Shaoxing office for possibly a couple of reasons. He said he has heard that one investor providing funds for loans is a government leader who had multiple donors supplying the funds, and he believes money from one of those donors may have been obtained through illegal activity, and “they followed the money to the Yiqian office,” Liu said.
He also suspects one or more of the employees at the Shaoxing branch of being dishonest and possibly involved in illegal activity. “I think some people hide things from me, including some employees,” Liu said. “It’s not the company’s fault. One of our employees may be making the mistake. It’s not under our control. … Now the policemen are doing the research and will tell us what’s happening.”
He said those wishing to besmirch the company took advantage of the office being checked by police at a time when Yiqian’s board of directors was in Europe for a trip and meetings that were scheduled from April 1-15, so board members weren’t in China to refute the lies and exaggerations.
Liu said now that company board members are back in China they have asked the police in Nanjing to assist the company and authorities in Shaoxing with the investigation into the branch. “In Nanjing the government supports us,” Liu said, “and I think maybe in the future it will be better.”
Regarding money laundering accusations for purchases in the U.S., Liu said he has government-approved permits obtained in China to transfer specified maximum amounts of money for each designated company he has created in the U.S., including all of those affiliated with Founders Group. “The news says I launder money. That’s bull. I have a permit,” said Liu, who provided a copy of one such permit to The Sun News.
An Eastmoney.com article questioned the validity of Fund364, Inc., a lending company outside San Francisco, accusing it of being a shell company. Liu said its CEO is a 10-percent partner in Yiqian Funding and Fund364 is a real company that has been damaged by the rumors and reports. He said he will be traveling to San Francisco to meet with the CEO next week.
“The news has been very bad for this company and the CEO is very angry,” Liu said.
Fund364, Inc. was incorporated in California in February 2014, according to state records. A representative of Fund364 denied The Sun News’ request for an interview with the CEO via an email from the company’s primary email address, but insisted that it is a registered lending company in California that is actively doing business with consumers.
A recent story in the World Journal suggests Liu may be backed by Li Yuanchao, the current vice president of the People’s Republic of China. Another article in China suggested Liu may have been assisted in fraudulent money transfers by a government official, and Liu said he has also been linked to Ling Wancheng, a businessman with political connections in China who is believed to have fled to the U.S. and is wanted for extradition by Chinese leaders. Liu says he has never met any of the men.
“They want to connect me to politics,” Liu said. “In China I never touch politics because in China politics are very dangerous. They want the new government to go after me.”
Multiple reports, including one in World Journal, allege Liu has donated to Donald Trump’s presidential campaign. Though Founders Group property Pawleys Plantation hosted a Trump town hall event in February, Liu claims the hall was rented and that neither he nor any of his companies have donated to any U.S. political campaign.
Trump campaign press secretary Hope Hicks said last week via email that she is not aware of any donations from Liu or affiliated companies.
Liu said he has been entering the U.S. through a B1/B2 business/tourist visa and has an opportunity to gain citizenship because of the property he now owns and is considering it. He has a residence in Myrtle Beach and said he plans to return to China for business within the next couple months.
“I think time will give us the real answer,” said Liu.
Local leaders are hoping time will provide more answers. Myrtle Beach Mayor John Rhodes and Horry County Council Chairman Mark Lazarus, who both visited a Yiqian business during a trip to China earlier this year, said last week the published allegations are concerning but they would seek more information to determine if they would have any impact on the local businesses and future Chinese investment.
Founders Group International or subsidiary companies purchased 22 courses between September 2014 and April 2015, as well as the Prime Times golf membership program, tee time call center, two golf package companies and a few popular golf- and tourism-related websites.
Liu said the only FGI-managed course that he does not have ownership stake in is Founders Club at Pawleys Island, which he said is primarily owned by Lily Xue of Nanjing, who has been on the Grand Strand multiple times and brought 30 Chinese businessmen and entrepreneurs who are former graduate school classmates to Myrtle Beach in November to vacation and look at the beach’s investment opportunities.
FGI or a subsidiary company purchased 29.1 acres of Myrtle Beach oceanfront property from Grande Dunes owner LStar Communities in January for $25.6 million, according to Horry County records, and a luxury high-rise hotel is a probability for the property.
FGI or subsidiary companies also own more than 300 acres of undeveloped land at Wild Wing Plantation, TPC Myrtle Beach and International World Tour Golf Links; 200 lots at Wild Wing; the fledgling 80-resident multifamily Stonewall Villas development in Longs; and other tracts of land. FGI president and partner Xian ‘Nick’ Dou said all of the purchases are debt-free.
FGI is creating a real estate division to market and sell some of the non-course property it has acquired.
“We have created a good opportunity here,” Liu said. “We can bring more jobs and that’s good for Myrtle Beach, and we can bring Chinese here to play golf and visit … and maybe some Chinese will buy houses.
“We have big hopes for the future. Right now we’re not earning a lot but we are just beginning and hope everything will go well in the future.”
A piece of the market
Some of the Grand Strand holdings of Founders Group International and its investors:
Aberdeen Country Club
Long Bay Club
River Hills G&CC
International World Tour Golf Links
Pine Lakes Country Club
Grande Dunes Resort Course
MBN King’s North
Wild Wing Plantation and.
TPC Myrtle Beach
Litchfield Country Club
Founders Club at Pawleys Island
Tee Time Central call center
Ambassador Golf packager
Myrtle Beach Golf Trips packager
Prime Times golf membership program
29 oceanfront acres in Myrtle Beach
About 300 acres of undeveloped land at Wild Wing Plantation, TPC Myrtle Beach and International World Tour Golf Links
About 200 lots at Wild Wing Plantation
Stonewall Villas development in Longs