How a Florida Shopping Mall Ended Up in the Hands of a Chinese Fugitive

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The Fashion Mall hasn’t much lived up to its name. Already faltering a decade ago, the South Florida shopping mall has since been hammered by a hurricane, vacated by its tenants and put into bankruptcy, all the time, it turns out, being partially owned by a fugitive from China.

Busted plans to redevelop the dilapidated mall have featured in a lawsuit between its Chinese investors. Du Zhenzeng, a steel baron from northern China, sued his naturalized American business partner, Wei Chen, for using their business “as his personal piggy-bank” to fund a flashy lifestyle that includes a Bentley and yacht trips, according to testimony in that lawsuit.

In a court hearing in October in Fort Lauderdale, Mr. Du’s lawyers said he invested nearly $160 million in the mall development project. Mr. Chen said the funds Mr. Du promised never materialized.

Then, last month, new troubles arose. Back in China, Mr. Chen is known as He Yejun, according to court and immigration records, and that name appeared on an Interpol list released by Chinese investigators of 100 wanted fugitives, mostly officials and executives, who had fled abroad. Mr. He is accused by prosecutors of misappropriating 1 million yuan, then about $120,000, from the brewery that he ran before fleeing to the U.S. in 1999, according to the Interpol notice.

In the midst of a full-throttle campaign against corruption at home, China’s government is trying to show transgressors there is no refuge abroad. Some on the wanted list have lived many years overseas, with the U.S. a favored destination, creating new lives and hiding their old ones.

Mr. Du said he didn’t know of Mr. Chen’s past until reading the news of the Interpol list and recognizing the photo of Mr. He. In a telephone call to his home in Aventura, Fla., Mr. Chen referred questions to his lawyers and hung up. Three lawyers whom public documents say represented Mr. Chen or his businesses didn’t return calls, while a fourth said he doesn’t know if Mr. Chen is Mr. He.

Mr. Chen and Mr. He share the same birth date, Feb. 24, 1959, as listed on Florida voter-registration records and divorce records filed in the U.S. and the Chinese arrest warrant. A lawyer who previously worked for Mr. Chen in Florida, Pamela Anselmo, testified in Florida state court last year that Mr. Chen previously went by the name He Yejun. U.S. immigration records in the citizenship application of Mr. Chen’s wife, Huang Hong, identify him with two names: Wei Chen and He Yejun.

The State and Justice departments declined to comment on whether China has requested the return of Mr. Chen, and federal prosecutors in Florida declined to say whether they’re investigating.

Huang Hong, who is wanted by the authorities in China for allegedly misappropriating funds. China’s anticorruption agency in April named her, alongside He Yejun, among a list of 100, as a wanted Chinese fugitive. The agency said she fled China in 1998 and likely went to the U.S. ENLARGE
Huang Hong, who is wanted by the authorities in China for allegedly misappropriating funds. China’s anticorruption agency in April named her, alongside He Yejun, among a list of 100, as a wanted Chinese fugitive. The agency said she fled China in 1998 and likely went to the U.S. PHOTO: CHINA’S MINISTRY OF PUBLIC SECURITY
ENLARGE
The Obama administration has demonstrated a willingness to cooperate with China in its hunt for fugitives, and the most-wanted list is causing discomfort for some. U.S. prosecutors in March indicted another official on the wanted list, a former director of a massive government grain-storage facility in central China.

Troubles at the Fashion Mall have been apparent for years to people in and around Plantation, a city of 85,000 people between the Everglades and Fort Lauderdale. The mall gradually emptied after Hurricane Wilma slammed into it in 2005, driving Macy’s Inc. and the other tenants to close there.

The city levied roughly $50,000 in fines for its unkempt exterior and ordered the developer—companies owned jointly by Mr. Chen and Mr. Du’s steel company—to seal its parking structure to discourage the homeless from settling there. Meanwhile, the city leaders waited for the redevelopment.

“They’d come in with plan after plan, but nothing ever came of it,” Plantation Mayor Diane Bendekovic said. “There was one excuse after the other. It was usually that the funding hadn’t come through.”

Mr. Chen’s path to Plantation began before he was Mr. Chen. As He Yejun, he was general manager of Tangshan Haomen Group, a brewer that was headquartered in the northern China industrial city of Tangshan.

He briefly figured in an earlier scandal; he had his photo taken with then-President Bill Clinton and other Chinese visitors to the White House in 1994 in an episode that became part of an inquiry into Chinese money in U.S. political campaigns. Mr. He wasn’t accused of improper donations to the Clintons. The man who introduced Mr. He and the other Chinese officials to the Clintons, American entrepreneur Johnny Chung, born in Taiwan, pleaded guilty in 1998 to funneling illegal contributions to the Clinton re-election campaign as well as other Democratic candidates.

In 1995, Mr. He had a falling out with a girlfriend and then became romantically involved with the brewery’s accountant, Huang Hong, according to an arrest warrant issued in 1999 by provincial prosecutors. The warrant said Mr. He transferred the 1 million yuan from the company to bank accounts of the former girlfriend and her father to keep them from bothering him.

Mr. He and Ms. Huang married in 1998, and she moved to Florida with their daughter. Mr. He later joined them, changing his name to Wei Chen, according to immigration documents. Immigration authorities denied Ms. Huang’s application for citizenship in 2010, ruling that her divorce from Mr. Chen in 2000 and remarriage to an American citizen in 2003 were ruses to gain citizenship. Florida property records show that Mr. Chen and Ms. Huang together bought a condo in Aventura, Fla., last year for $2.2 million. Ms. Huang couldn’t be reached for comment.

After working as a waiter in a restaurant, Mr. Chen turned to real estate, according to his court testimony. He scouted the rundown Fashion Mall and in 2004 bought the 830,000 square foot mall for $37 million, state property records show. The money came from Tangshan Ganglu Iron & Steel Co., Mr. Du’s company, according to his attorney.

Mr. Du was looking to invest in a sizable U.S. real-estate project to take advantage of an immigrant-investor program and put his teenage son and daughter into an American high school, according to his court testimony. A friend introduced him to Mr. Chen, who also hailed from Tangshan.

The deal that resulted gave Mr. Du, through his company, Ganglu, a majority stake in a partnership with Mr. Chen to redevelop the mall, Mr. Du said during the same court hearing. Over several years, Mr. Chen scooped up adjacent land parcels through their partnership, a total of 32 acres. Mr. Du, however, testified in court that Mr. Chen invested none of his own money in the partnership, always using Ganglu’s money and taking out loans to assemble the 32-acre project.

By last year, Mr. Du still hadn’t received his U.S. passport and, according to his court testimony, was growing suspicious about the mall’s lack of progress despite multiple recapitalizations that totaled at least $160 million. He confronted Mr. Chen at his home in Aventura but got conflicting answers about the partnership’s finances.

He hired auditors and then tried to fire Mr. Chen, who produced a document that said he couldn’t be removed without his consent and that was signed by Mr. Du. October’s trial in Florida state court the 17th Circuit Court in Broward County centered on that document, which Mr. Du said was forged.

“This is my company,” Mr. Du testified. “It’s impossible (that) I would authorize him to (have) this kind of power.”

Under questioning, Mr. Chen said he paid himself a $400,000 salary in 2013 from the partnership. Among his assets were a condominium in Aventura worth $2 million, plus the Bentley, and a yacht slip at the Aventura Marina. Mr. Chen told the court in October that he sometimes used a 70-foot yacht named Nesya though he says he didn’t own it.

The court ruled in October that it wasn’t Mr. Du’s signature on the document granting Mr. Chen authority over the project, but didn’t determine whose signature it was. Within days, Mr. Chen put Fashion Mall into Chapter 7 bankruptcy, which requires liquidation.

In March, private-equity firm Encore Capital Management acquired the Fashion Mall at a bankruptcy auction for $37.7 million to redevelop the site into apartments, offices and an open-air shopping center.

A U.S. bankruptcy trustee is determining which of the unsecured claims against the property merit repayment and whether to sue to recoup funds from elsewhere. Mr. Du’s company has registered a claim of $48.7 million; Mr. Chen has filed an individual claim of $454,400.

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