Los Angeles County Trio Found Guilty of Laundering Target Gift Cards Purchased by Victims of Transnational Fraud Rings
Sep 28, 2023
From the U.S. Attorney’s Office, Central District of California
LOS ANGELES – Three Los Angeles County residents were found guilty by a jury today of scheming to launder the proceeds of scams targeting older adults and other victims who were conned into buying Target gift cards, supposedly to resolve various financial problems.
At the conclusion of a 10-day trial, a jury convicted the three defendants – Blade Bai, 35, of El Monte; Bowen Hu, 28, of Hacienda Heights; and Tairan Shi, 29, of Diamond Bar – of one count of conspiracy to commit money laundering. The jury also found Bai guilty of an additional charge of conspiring to commit money laundering, an offense he committed after being freed on bond in the initial case.
Hu and Shi were remanded into custody immediately after today’s verdict, and Bai has been in custody since February 2022
According to evidence presented at trial, telephone scammers based overseas lied to victims to persuade them to buy one or more Target gift cards to fix nonexistent problems. Some victims received calls from fraudsters posing as law enforcement officers or government employees, who claimed the victims’ identities had been stolen or warrants had been issued for the victims’ arrest, and that money in the form of Target gift cards was necessary to remedy the problems.
Other victims were tricked into responding to tech support emails that purported to be from well-known companies and claimed there were serious problems relating to the victims’ financial accounts that could only be resolved by paying money in the form of Target gift cards.
As a result of the scammers’ lies and misrepresentations, the victims were convinced to buy Target gift cards – often more than one – typically in increments of $500 and to read the card numbers and access codes over the phone to the scam artists.
Bai, Hu and Shi obtained more than 5,000 gift cards from a group of unknown persons in China that called itself the “Magic Lamp” and sold gift card information via the online messenging application WeChat.
The defendants used WeChat to coordinate the distribution of gift cards to “runners,” who used the gift cards at Target stores primarily in Los Angeles and Orange counties to purchase consumer electronics, other gift cards and other items, according to court documents. 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.
Prosecutors estimate that the defendants laundered more than $2.5 million in gift cards between approximately June 2019 and November 2020.
Bai was arrested on a criminal complaint in this matter in November 2020 and was released on bond. Within days of his release from federal custody, Bai engaged in another money laundering conspiracy involving Target gift cards. Bai offered to introduce an associate to someone who bought merchandise from him, and thereafter asked the associate to help him liquidate approximately $36,000 of Target gift cards. With Bai unwilling to be paid directly for the sale, two accomplices together arranged a deal in which they sold, to the customer, Bai’s gift cards for approximately 90 cents on the dollar.
Law enforcement arrested Bai again in February 2022 on a superseding indictment and he has remained in federal custody since that time.
United States District Judge André Birotte Jr. scheduled a January 26, 2024, sentencing hearing, at which time Bai, Hu and Shi will face a statutory maximum sentence of 20 years in federal prison for each money laundering conspiracy count.
Yan Fu, 60, of Chino Hills, pleaded guilty in September 2022 to one count of conspiracy to commit money laundering. Fu, who was one of the “runners” in this conspiracy, is serving a 20 month-sentence in federal prison. Judge Birotte also ordered Fu to pay $48,073 in restitution.
This case is the product of an investigation by Homeland Security Investigations (HSI) and the FBI. The investigation was conducted under the auspice of 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.
The Social Security Administration’s Office of the Inspector General provided substantial assistance during the investigation, as did the following law enforcement agencies: the Brea Police Department; the La Palma Police Department; the Menifee Police Department; the Glynn County (Georgia) Police Department; the Fontana Police Department; the Charlotte-Mecklenburg (North Carolina) Police Department; the Streamwood (Illinois) Police Department; the Cleveland Police Department; the Madera County 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 Police Department; the Marin County Sheriff’s Office; the County of Hawaii Police Department; the Henderson (Nevada) Police Department; the Wilmington (Massachusetts) Police Department; the Las Vegas Metropolitan Police Department; the Lewisville (Texas) Police Department; the Gardena Police Department; the Des Moines 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 Police Department.
Assistant United States Attorney Monica E. Tait of the Major Frauds Section and Justice Department Trial Attorneys Wei Xiang and Meredith Healy of the Civil Division’s Consumer Protection Branch are prosecuting the case.
The United States Attorney’s Office and the Consumer Protection Branch are part of the Transnational Elder Fraud Strike Force, which investigates and prosecutes scams targeting older adults and are run by transnational criminal organizations. These scams include 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 FBI’s Internet Crime Complaint Center at www.ic3.gov, the Federal Trade Commission at https://reportfraud.ftc.gov/#/ or (877) 382-4357, and your local police department.
Read more from the SSA: Read More