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Trio From Los Angeles County Convicted of Money Laundering Using Gift Cards

Trio From Los Angeles County Convicted of Money Laundering Using Gift Cards

A judge's gavel in a file photo. (rawpixel/Unsplash)

City News Service

City News Service

9/27/2023

Updated: 9/27/2023

LOS ANGELES—Three Los Angeles County residents were found guilty on Sept. 26 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 Blade Bai, 35, of El Monte, Bowen Hu, 28, of Hacienda Heights, and Tairan Shi, 29, of Diamond Bar, of one federal count of conspiracy to commit money laundering, according to the U.S. Attorney’s Office.
The jury also found Mr. 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.
Mr. Hu and Mr. Shi were remanded into custody immediately after the verdict in Los Angeles federal court. Mr. 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, according to the evidence.
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, according to court documents.
Mr. Bai, Mr. Hu, and Mr. 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 messaging 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 June 2019 and November 2020.
Mr. Bai was arrested on a criminal complaint in November 2020 and was released on bond. Within days of his release from federal custody, Mr. Bai engaged in another money laundering conspiracy involving Target gift cards, according to court documents.
Mr. Bai offered to introduce an associate to someone who bought merchandise from him, and thereafter asked the associate to help him liquidate about $36,000 of Target gift cards, according to the evidence. With Mr. Bai unwilling to be paid directly for the sale, two accomplices together arranged a deal in which they sold, to the customer, Mr. Bai’s gift cards for around 90 cents on the dollar.
Law enforcement arrested Mr. Bai again in February 2022 on a superseding indictment and he has remained in federal custody since that time.
U.S. District Judge André Birotte Jr. scheduled a Jan. 26 sentencing hearing, at which time Mr. Bai, Mr. Hu, and Mr. Shi will face up to 20 years in federal prison for each money laundering conspiracy count, prosecutors noted.
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