Wu Xiaohui, the former chairman of Anbang Insurance Group, has been sentenced to 18 years in prison after being convicted by a Chinese court of orchestrating a $12 billion fraud. Wu had become the poster boy for Chinese debt-fueled U.S. real estate purchases, acquiring some of New York’s most notable assets between 2014 and 2016.
In addition to his prison term, Wu will also have $1.65 billion worth of assets seized by Chinese authorities, the state news agency Xinhua said Thursday.
Wu was charged with embezzling about $1.6 billion and raising about $10.2 billion in capital illicitly. His one-day trial resulted in a guilty verdict, and he reportedly expressed remorse. Prosecutors in China said Wu had compromised “the safety of investors’ capital” and “crushed national financial security,” according to the South China Morning Post.
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Anbang came to symbolize a group of Chinese conglomerates that aggressively snapped up assets throughout the U.S. and Europe, leading the government to enact strict capital controls and detain numerous business leaders. It paid $1.95 billion in 2014 to acquire the Waldorf Astoria from Blackstone Group and paid $6.5 billion in 2016 to acquire the Strategic Hotels & Resorts portfolio, also from Blackstone. Also in 2016, it made an unsuccesful bid to acquire Starwood Hotels and Resorts for $14 billion. The company made headlines last year for its late-stage negotiations with Kushner Companies to come in as a redevelopment partner for that firm’s troubled skyscraper, 666 Fifth Avenue. Anbang eventually pulled out of the deal. In those heady years, Wu spoke at Harvard University, hosted a gala at the Waldorf for the biggest names in the Chinese and U.S. business worlds, and was the subject of a dozen news profiles.
“If you choose to stay in rural villages, you can only meet common village girls,” Wu told students at Harvard in 2015 about the company’s global push. “Yet if you come to Paris, you will have the chance to lay your eyes on the Mona Lisa.”
This February, the Chinese government announced that it would appoint an insurance regulator to take control of Anbang, which it said had fallen into financial crisis. The government announced last month that it would inject $10 billion in capital into the company.
Despite rumors that the Waldorf might be among the assets to hit the market, Anbang’s government caretakers have continued with plans to convert 352 hotel rooms into condominiums.
Anbang’s other assets in New York include the Essex House – part of the Strategic Hotels portfolio purchase – and an office condo at 717 Fifth Avenue that it bought for $414 million in 2015.