The San Francisco Chronicle reported in 2019 that 555 Fulton St. was, following a significant delay, in the “finalizing construction” stage. Now, the billionaire developer Li Zhang has been arrested in London for bribery in San Francisco and is also facing extradition.
Chinese billionaire Li Zhang, co-founder and CEO of Guangzhou R&F Properties, was detained on Nov. 30 in London pursuant to a provisional warrant issued by the Northern California District Office of the United States Attorney’s Office.
According to Reuters, Zhang was charged with “participating in a scheme to bribe public officials” between 2015 and 2020.
According to Forbes, Zhang, 69, is worth $2.3 billion. He was given bail of less than 15 million pounds (about $18.4 million) ahead of a judicial struggle to prevent extradition to the United States. He failed to appear at a hearing on December 12.
Zhang will be restricted to an apartment 24 hours a day as part of his bail conditions and will be susceptible to CCTV and security surveillance by a London investigative and security risk firm. According to the South China Morning Post, when he leaves the residence to attend court proceedings, he will be handcuffed to a representative of the security company.
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Guangzhou R&F Properties published a message on their official WeChat account that read: “Li Zhang was accused of bribery for hosting a banquet in China and providing hotel accommodation for the former San Francisco Public Works Director.”
This was the first time that R&F Properties addressed the alleged charge of bribery against Zhang. The declaration verifies that Zhang is the individual referred to as “DEVELOPER 1” in the corruption case involving Mohammed Nuru, the former director of San Francisco Public Works.
In December 2021, Nuru admitted guilt to the allegation of honest services wire fraud, which also included a number of bribes and acts of corruption committed throughout his tenure in office. In August 2022, U.S. District Judge William H. Orrick sentenced Nuru to seven years in prison.
According to a press release from the United States Attorney’s Office for the Northern District of California, Nuru admitted in the plea deal that he “received free travel, gifts, and benefits, for working with Walter Wong to use Nuru’s official position to benefit a billionaire developer from China.”
According to the affidavit (read below) of FBI agent James A. Folger, Zhang (referred to as “DEVELOPER 1”) first appeared in the Federal investigation into the Nuru affair in the fall of 2018, when Nuru was discussing his then-upcoming trip to China on his cell phone.
In a phone discussion with his partner Sandra Zuniga in November 2018, Nuru gushed about how he was pampered by a five-star hotel: “We get there, they take us to our rooms and everything, and everybody’s in their room, and then as soon as I come out, they’re like still outside our room. I’m like, ‘Oh man, what’s going on?’”
During the phone call, Nuru added that prior to his travel to China, he had no idea how wealthy Zhang is.
He said in the call: “I’m helping him with a project here, San Francisco. So whenever he comes, I always go to see him. I didn’t know … he has this plane; I didn’t know that, how big he was, until I got to China.”
The property Nuru was referring to is 555 Fulton Street in San Francisco, which was built by R&F’s American affiliate Z&L Properties Inc. It was referred to as a “Multimillion-Dollar Mixed-Use Development” in the allegations made against Nuru. Wong was employed by that project as a consultant.
On the same phone call with Zuniga, Nuru said, “He [Zhang] had a whole list of things that we need to get done.”
Nuru further stated that the project was unable to obtain a certificate due to a suspected flaw in the glass windows manufactured in Mexico.
He added, “Yup, and he’s very upset about [it] because he’s, you know, he thinks he’s lost, he’s spent so much money and … can’t see the end of the tunnel.”
When Nuru was in China in 2018, one of the company’s employees highlighted the glass issue. Nuru instructed one of his managers to handle the problem and speed the process over the phone.
The San Francisco Chronicle reported in 2019 that 555 Fulton St. was, following a significant delay, in the “finalizing construction” stage. The developer redesigned the building’s exterior without getting authorization from the city, which resulted in a delay of more than a year. The builder was compelled to return to the approved, but more expensive, glass-encased design.
Tom Hui, a former director of the Department of Building Inspection (DBI), who had dinner in February 2019 with Zhang and Wong, resigned in March 2020 as a result of internal inquiries conducted by Dennis Herrera, the city attorney at the time.
It was unclear if Hui assisted with the project’s permit at 555 Fulton Street. According to Mission Local, the FBI conducted a raid on the DBI’s server room in the early months of 2020 after Nuru was arrested and charged. Hui was not charged of any offenses under federal law.
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