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New Jersey Woman Charged in $10 Million Investment Scam

Oct. 24 (Bloomberg) -- A New Jersey woman was charged with defrauding investors in the U.S. and China of $10 million by falsely claiming she ran a textile wholesale distributor that had been awarded a $156.6 million contract by New York City.

Sara Rong Liu, 52, was charged with wire fraud and arrested today at her home in Mahwah, according to a statement by U.S. Attorney Paul Fishman. Liu, a naturalized U.S. citizen, is scheduled to appear today in federal court in Newark, New Jersey. She faces as many as 20 years in prison.

Liu is president of Westone Inc., a company in Hackensack, New Jersey, “purportedly involved in the wholesale distribution of textiles as well as interior design,” according to Fishman’s statement. For three years until October 2013, she falsely told investors that Westone had a contract with the New York City Department of Design and Construction, Fishman said.

Liu created phony documents purportedly from the DDC and other government agencies to solicit “short-term loans” from investors, according to a Federal Bureau Investigation arrest complaint. She said they “would be repaid immediately upon the release of the first contract payment of $52.2 million from the NYC DDC,” the FBI said. “All of those statements were false.”

In a separate scheme, Liu said she sought $17 million from a dead uncle’s estate in China, according to the FBI. She said she first needed to raise money to pay estate taxes, and she would then share the inheritance, the FBI said.

The case is U.S. v. Liu, 13-mj-04185, U.S. District Court, District of New Jersey (Newark).

To contact the reporter on this story: David Voreacos in federal court in Newark, New Jersey, at dvoreacos@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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