City officials say they were unaware a former international affairs coordinator turned state employee faced allegations of fraud and soliciting bribes from Chinese businesses as she sought investors for a downtown Marion business venture.

The Indianapolis Star reported in the “The China Letter,” a two-part story published Sunday and Monday, that Monica Liang was accused of extorting a Chinese billionaire of $50,000 and pressed a company for an $8,000 bribe.

These allegations were detailed by a Chinese agency in a letter sent last year to the Indiana Economic Development Corp.

“We consider that Indiana-China relations are imperiled unless Monica is investigated and terminated,” the complaint reads in bold type.

Liang died unexpectedly in October 2011 from a cerebral hemorrhage. She worked as a translator for the city of Marion, traveling on overseas trips with both Mayor Wayne Seybold and his wife, before being hired by the IEDC in April 2011.

The IEDC investigated the claims in the letter but failed to contact law enforcement, according to the Indianapolis Star. It terminated Liang’s contract on Sept. 1, 2011, which was the same day former IEDC CEO and Indiana Secretary of Commerce Mitch Roob resigned.

Seybold said he only found out the full scope of the allegations when he read the Indianapolis Star stories. He could not speak to Liang’s tenure and activities with the state, but said he had no complaints about her work for the city.

“Monica did a great job for us,” he said. “We never had one complaint from anybody about her. We never had any complaints about her translations.”

Seybold hired Liang in 2008 as a translator and cultural liaison as the city sought more investment from China, where personal connections are essential to business deals. He said she helped the city “follow through” on Chinese contacts.

In 2010, Liang attracted the attention of the IEDC when YK Furniture, with Gov. Mitch Daniels, announced its intention to purchase the former Hobby Lobby building, 1500 S. Western Ave., and turn it into a furniture warehouse and distribution center.

The Indianapolis Star reported that on a February 2011 trip with the mayor’s wife, Jennifer, Liang met with representatives from Chinese companies and discussed a business venture of her own in Marion.

Seybold said his wife was not on an official trip for the city, though she did speak to other businesses about Marion.

Liang’s venture was a proposed mixed-use development for residential and commercial purposes in downtown Marion. She had purchased the Blumenthal building, 314 S. Washington St. She later changed the scope of the proposed project into a nursing home for disabled veterans.

Her former fiancée, Bryan Harris, who is on the Board of Public Works and Safety and the Marion Redevelopment Commission, said he worked for Maple Homes LCC, which owned the building.

“I tried to help her and give directions about what to do,” he said.

Harris said he knew Liang was pitching the project to Chinese investors, some of whom even visited Marion. However, he said he was surprised to read that some investors accused Liang of misrepresenting her position and the level of government support for the project.

“I thought she did a great job and didn’t realize that these other allegations were pending against her,” he said.

Seybold said Liang stopped working for the city and officially took a position with the IEDC in April 2011. But the Indianapolis Star reported that in February 2011 Roob signed a letter appointing her as the IEDC’s “Special Assistant to the Secretary of Commerce for Chinese Relations.”

The IEDC told the newspaper that it was an honorific title.

According to the Chinese complaint, Liang had been telling potential investors for her venture that she had been working for the state as a “special advisor” since 2010 and had lined up several government officials as shareholders, listing Daniels, Roob and Seybold as “government support.” The Indianapolis Star said all three denied they were shareholders in the project.

The complaint also details that she had received $50,000 in her personal account from Chinese billionaire Ao Yuqi after she claimed she could help him earn a Green Card.

As support for her claims that the project had government support, Liang included a copy of a letter from City Director of Development Darren Reese, which praised her $12 million “redevelopment vision” for downtown Marion and outlined a tax increment financing incentive the city could offer and return $6 million in projected tax revenue over 20 years.

Reese said the city “often” writes letters of support for projects and noted that particular project “never went anywhere.” He said he did not consider it a conflict of interest to write a letter supporting the business venture of one of his department’s employees.

“She wasn’t using this office or the city of Marion for any gain of (a) project that she already had designs on before she was with the department,” he said. “She wasn’t trying to hide it or use any influence.”

The Chinese complaint was made in July 2011, after representatives of the Chinese International Cooperation Association of Small and Medium Enterprises grew suspicious of Liang. It says that she claimed to be able to arrange a meeting with a Chinese businessman and Roob for a fee.

In the email, Liang said if the businessman “is sincere, have them transfer ($8,000 U.S. dollars) into my account and I will make arrangement immediately,” and then provided her account information. According to the Indianapolis Star, Liang denied having written that email, claiming her information had been improperly copied and pasted.

Two months after the complaint and an investigation that did not include law enforcement, the IEDC opted to terminate Liang’s contract. She died a month later.

The city hired its current international affairs coordinator — Luke Owsley — in July 2011. Officials told the Chronicle-Tribune at that time Liang would continue to do some work for the city, but Seybold said that was only until Owsley got “up to speed” and the city kept old projects under its control.

Councilwoman Madonna French, R-2nd District, said the Indianapolis Star stories raised several local questions, including about Jennifer Seybold’s involvement on the February 2011 trip to China.

“I don’t know if it was official business,” she said. “It would seem to me if we’d be sending an alternate to the mayor it would be Darren Reese.”

French, who has been supportive of efforts to snare international business, said she questioned the use of the international affairs coordinator. She said she would be looking at the position — which makes $33,000 per year — during the budget hearings next year.

Seybold said the allegations have never affected the city’s efforts to snare Chinese investment. Just last month, representatives from a Chinese agricultural company visited Marion.

“We have an impeccable relationship with the Chinese groups we’re doing business with,” he said, pointing out that no one — including the Chinese or the state — mentioned the allegations against Liang or complained about her work.

Reese also said the city received no complaints about Liang. He said language barriers can create misunderstandings and wished Liang would have had the opportunity to defend herself.

“I sure wish she was here to be able to explain it,” he said.

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