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Murder case highlights property money trail from China to US
Record bail for heiress draws attention to military origins of family fortune
A record bail posted in a California court for one of the accused in a murder case has thrown the spotlight on a property fortune that traces its roots to the Chinese military, in a graphic illustration of how money made in China has flooded overseas real estate markets.
Tiffany Li is a Chinese-American heiress accused of ordering a hit on her ex-boyfriend in San Mateo county, a leafy suburb of San Francisco where Teslas are more common than violent crime. In April she posted $4m in cash and $62m in California property as bail — among the highest ever posted in the US.
The eye-catching amount has drawn unwanted attention to her family’s business, a complex web of real estate interests whose origins can be traced to construction partnerships with the Chinese armed forces. It shows how guanxi, or connections, in China can translate into wealth in America.
California property markets have boomed as China’s newly wealthy seek havens overseas. Chinese homebuyers spent more than $28bn on US residential real estate in 2015, the most among foreign buyers, according to the Asia Society.
Ms Li’s mother, Li Jihong, made her initial fortune in Beijing in the 1980s by entering joint ventures with construction companies directly owned by the powerful General Logistics department of the People’s Liberation Army, according to corporate records and court cases. By the 1990s, the elder Ms Li’s property development company had snapped up desirable plots in the high-rent business district around the China World Hotel.
She owned a residence in California as early as the late 1980s, unusual for a mainland citizen of China in the early days of the country’s market reforms.
The younger Ms Li, now 31, studied at the University of San Francisco. Like manyfu’erdai, or offspring of the nouveaux riches, she embraced an ostentatious lifestyle. “There was a lot of bling,” said a person close to her. “They utilised the wealth more than [the mother] did.”
Along the way she met Keith Green, an aspiring chef, but they later separated. Mr Green had been fighting for shared custody of their two toddlers in April 2016 when his body was found dumped in the woods with a bullet through his head.
Ms Li is accused of conspiring to kill him. Kaveh Bayat, who was dating Ms Li, is charged with murder, and Olivier Adella, one of his friends, is charged with helping. Ms Li is pleading not guilty.
Both Ms Li and her mother declined requests for interviews submitted by the Financial Times through their lawyers and other family representatives.
The case has thrown a spotlight on the Li family business. The elder Ms Li and her business partners buy and develop real estate in the Bay Area, using a network of companies run by the same directors. In at least two cases, these associates established a company, bought a property, then sold it to another entity they controlled (or ended up controlling), repeating this process several times.
One such property at 576-600 El Camino Real in Belmont was purchased in 2014 by a limited liability company that listed Tiffany and her brother as members — that is, the publicly listed owners. It was sold on, twice, to two other companies with the same registration address. After these two transactions, the LLC that ultimately owned the property shared most of its members with the first LLC.
While the names of the members are publicly available, those of the other investors in the LLCs are not. Transfers of a single property among LLCs allow outside investors to buy in and cash out without any requirement to disclose their identities, says Paul Gillis, an accounting expert at Peking University’s Guanghua School of Management. “It’s a typical Chinese investment pattern. This is how groups of Chinese often invest in US real estate.”
The Li family worked closely with CHS Development Group, now constructing the El Camino Real site. Asked why the property was transferred multiple times among LLCs, vice-president Mark Haesloop denied the deals were “right hand to left hand . . . They are all separate entities. The purpose for any sale is economic.” He declined to give further details.
Ms Li’s business facilitated real estate investment by Asian buyers, Steve Wagstaffe, San Mateo County district attorney, said. “We know that the business she was ostensibly in was finding real estate for people from China and eastern [Asia].”
Mr Haesloop disputed this. “She is not a broker for Chinese money coming into the United States,” he said. The identity of the investors in her projects and in CHS projects was “none of your business”, he said.
Mr Haesloop added he believed “most of them” were US citizens but acknowledged that, “frankly, some of these people I’ve never met, never laid eyes on”.
Prosecution worries that Ms Li might flee the country led to the record-setting bail amount. She is next due to appear in court in July.
Additional reporting by Sherry Fei Ju in Beijing
