#AceNewsReport – Oct.01: Two other defendants named in the indictment – Blade Bai, 33, of El Monte, a U.S. citizen, and Yan Fu, 58, of Chino Hills, also a Chinese national – will be summonsed to appear in federal court next month….
#AceDailyNews reports that a federal grand jury indicts 4 SoCal defendants in scheme to launder Target gift cards purchased by fraud victims from across the US: Bowen Hu, 26, of Hacienda Heights, and Tairan Shi, 27, of Diamond Bar, both Chinese nationals, were taken into custody today and are expected to be arraigned this afternoon in U.S. District Court in downtown Los Angeles.
The one-count indictment unsealed today charges all four defendants with conspiring to launder proceeds of wire fraud that were stored on gift cards issued by Target. The indictment alleges that Bai, Hu and Shi obtained more than 5,000 gift cards from a group that called itself the “Magic Lamp” and sold gift card information via an online messenger application.
This case is the result of an investigation by HSI Los Angeles’ El Camino Real Financial Crimes Task Force, a multi-agency task force comprised of federal and state investigators focused on financial crimes in Southern California, with substantial assistance from the FBI.
Bai, Hu and Shi oversaw the distribution of gift cards to “runners,” including Fu, who used the funds on the cards at Target stores primarily in Los Angeles and Orange counties to purchase consumer electronics, other gift cards and other items, according to the indictment. Through the purchases and other transactions at multiple Target stores, the defendants and their co-conspirators sought to conceal the fact that the gift cards had been originally funded with fraudulent proceeds.
The indictment alleges that perpetrators of fraud schemes induced victims across the United States to purchase Target gift cards. Then, the indicted defendants in Southern California conspired to launder the proceeds. The victims, who were often older adults, were tricked into buying the gift cards based on various fraudulent schemes, including:
- Government-imposter scams, in which fraudsters impersonate government officials, such as officials with the Social Security Administration or local police officers, and falsely claim that victims need to purchase gift cards to resolve an issue, such as a pending arrest warrant or a problem with the victims’ Social Security number; and
- Tech support scams, in which fraudsters trick victims into believing there is a serious problem with their computer or with account access which can only be solved by paying substantial amounts through gift cards.
“The case against these defendants is the result of the impressive work by HSI’s El Camino Real Financial Crimes Task Force,” said David A. Prince, Special Agent in Charge for HSI Los Angeles. “These types of crimes have devastating effects on the victims. Through coordinated investigative efforts by law enforcement and our prosecution partners, HSI will continue to aggressively investigate those who prey on our elderly population.”
“The Department of Justice and its law enforcement partners are committed to tackling fraud schemes from every angle,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Individuals who knowingly facilitate the victimization of American consumers make fraud possible, are criminally culpable for the offenses and should expect to be held accountable.”
According to court documents, Bai, Hu and Shi obtained the gift card numbers from the Magic Lamp group, often on the same day fraud victims had purchased the gift cards at the direction of a telephone scammer. Fu travelled to as many as 17 Target stores in a single day to conduct gift card transactions, and Bai resold the purchased consumer electronics, using some of the proceeds to pay the Magic Lamp group, the court documents allege.
Investigators conservatively estimate that the defendants laundered more than $2.5 million in gift cards between approximately June 2019 and November 2020.
All four defendants are charged with conspiracy to commit money laundering, a felony offense that carries a statutory maximum penalty of 20 years in prison.
Bai and Fu were initially arrested in this matter on November 17, 2020 pursuant to criminal complaints. Bai was released on bond and was subsequently named in a criminal information charging him with conspiracy to commit money laundering. Bai pleaded not guilty to the charge in the information. The indictment announced today supersedes the criminal information. The complaint against Fu was dismissed in December 2020 to further the investigation that has resulted in the indictment.
“This case offers an important reminder to consumers that gift cards are for presents to friends and loved ones – they should never be used for payments to any government or corporate entity,” said Acting U.S. Attorney Tracy L. Wilkison for the Central District of California. “Don’t be fooled by callers claiming to be with a government agency, a bank or any other institution demanding that you purchase gift cards. There is no reason to purchase a gift card to resolve a problem with an account, your Social Security number or a supposed criminal case.”
The Social Security Administration, Office of the Inspector General also provided assistance during the investigation, as did the following: the Brea Police Department, the Glynn County (Georgia) Police Department, the Fontana (California) Police Department, the Charlotte-Mecklenburg (North Carolina) Police Department, the Streamwood (Illinois) Police Department, the Cleveland (Ohio) Police Department, the Madera County (California) Sheriff’s Office, the New York Police Department, the Norwood (New Jersey) Police Department, the Loudon County (Virginia) Sheriff’s Office, the Waukesha County (Wisconsin) Sheriff’s Department, the Fremont (California) Police Department, the Marin County (California) Sheriff’s Office, the County of Hawaii Police Department, the Henderson (Nevada) Police Department, the Wilmington (Massachusetts) Police Department, the Las Vegas (Nevada) Metropolitan Police Department, the Lewisville (Texas) Police Department, the Gardena (California) Police Department, the Des Moines (Iowa) Police Department, the Cobb County (Georgia) Sheriff`s Department, the Millburn (New Jersey) Police, the Wauwatosa (Wisconsin) Police Department, the San Angelo (Texas) Police Department, the Fairfax City (Virginia) Police Department, and the Virginia Beach (Virginia) Police Department.
The case is being prosecuted by the U.S. Attorney for the Central District of California’s Major Frauds Section and the Justice Department Civil Division’s Consumer Protection Branch.
The U.S. Attorney’s Office and the Consumer Protection Branch are part of the Transnational Elder Fraud Strike Force, which investigates and prosecutes scams run by transnational criminal organizations, including mass mailing, telemarketing and tech support scams.
If you fall victim to a gift card scam, immediately call the gift card issuer and ask them to freeze the gift card numbers involved – and save your receipt and the gift card. Then, report the crime to the Federal Trade Commission at https://reportfraud.ftc.gov/#/ or 877-382-4357, and your local police department.
HSI is the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel and finance move.
HSI’s workforce of over 10,400 employees consists of more than 7,100 Special Agents assigned to 220 cities throughout the United States, and 80 overseas locations in 53 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.
#AceNewsDesk report ………Published: Oct.01: 2021:
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