Three individuals from Los Angeles County found guilty of money laundering through gift cards.
Three Los Angeles County Residents Convicted of Money Laundering Scheme
LOS ANGELES—In a dramatic conclusion to a 10-day trial, three individuals from Los Angeles County were found guilty on September 26 of orchestrating a money laundering scheme that targeted older adults and other victims. The scam involved convincing victims to purchase Target gift cards under false pretenses, supposedly to resolve various financial problems.
The convicted individuals, Blade Bai, Bowen Hu, and Tairan Shi, were charged with conspiracy to commit money laundering. Additionally, Bai was found guilty of an additional charge of conspiring to commit money laundering while out on bond.
Hu and Shi were immediately remanded into custody following the verdict, while Bai has been in custody since February 2022.
During the trial, evidence revealed that the scammers, operating from overseas, deceived victims into purchasing Target gift cards by posing as law enforcement officers or government employees. They claimed that the victims’ identities had been stolen or that warrants had been issued for their arrest, and that purchasing Target gift cards was the solution to these fabricated problems.
Other victims fell prey to tech support emails, falsely claiming to be from reputable companies, which alleged serious issues with the victims’ financial accounts that could only be resolved through the purchase of Target gift cards.
As a result of these deceitful tactics, victims were coerced into buying Target gift cards, often in increments of $500, and providing the card numbers and access codes to the scammers over the phone.
Bai, Hu, and Shi obtained over 5,000 gift cards from a group in China known as the “Magic Lamp,” which sold gift card information through the messaging app WeChat.
Using WeChat, the defendants coordinated the distribution of gift cards to “runners” who used them at Target stores in Los Angeles and Orange counties to buy consumer electronics, additional gift cards, and other items. This elaborate scheme aimed to conceal the fact that the gift cards were funded with fraudulent proceeds.
Prosecutors estimate that the defendants laundered more than $2.5 million in gift cards between June 2019 and November 2020.
Bai, who was initially arrested in November 2020 and released on bond, engaged in another money laundering conspiracy involving Target gift cards shortly after his release. He enlisted an associate to help him liquidate approximately $36,000 worth of gift cards, resulting in a deal where the cards were sold for around 90 cents on the dollar.
In February 2022, Bai was arrested again on a superseding indictment and has remained in federal custody since then.
U.S. District Judge André Birotte Jr. has scheduled a sentencing hearing for January 26, where Bai, Hu, and Shi could face up to 20 years in federal prison for each count of money laundering conspiracy.
How did the scammers convince their victims that purchasing gift cards was the only way to resolve their issues and avoid legal consequences?
Had been compromised or that they owed taxes or fines, and convinced them that purchasing the gift cards was the only way to resolve their issues and avoid legal consequences. The scammers then instructed the victims to provide the gift card codes over the phone, allowing them to access the funds and launder the money without leaving a trace.
The money laundering scheme targeted vulnerable individuals, particularly older adults who might be more easily deceived. The scammers took advantage of their trust in authority figures and their lack of familiarity with technology to manipulate them into believing the false narratives and following their instructions.
Over the course of the investigation, law enforcement officials were able to trace the flow of funds and gather substantial evidence against the three individuals involved. They uncovered a complex network of financial transactions conducted both domestically and internationally, further highlighting the extent of the money laundering operation.
Money laundering is a serious crime that undermines the integrity of financial systems and enables the funding of illegal activities. The conviction of these three individuals sends a strong message that such activities will not be tolerated, and law enforcement agencies are dedicated to protecting the public from these types of scams.
The case also serves as a reminder to the public to be cautious and vigilant when dealing with requests for money or personal information, especially when it comes from unexpected sources or involves unusual payment methods. It is crucial to verify the identity and legitimacy of individuals claiming to be law enforcement officers or government employees, and to never provide sensitive information or make financial transactions based solely on a phone call or email.
This successful prosecution would not have been possible without the collaboration and dedication of law enforcement agencies, both domestic and international, as well as the cooperation of the victims who came forward to provide crucial information. It serves as an example of the importance of reporting suspicious activities and working together to combat fraud and financial crimes.
As the impact of financial scams continues to grow, it is crucial for individuals, communities, and organizations to stay informed and educated about the latest tactics used by fraudsters. By raising awareness and taking proactive measures, we can protect ourselves and others from falling victim to these schemes and contribute to a safer and more secure society.
In conclusion, the conviction of these three individuals involved in a money laundering scheme targeting older adults and other victims marks an important milestone in the fight against financial crimes. It serves as a reminder of the need for vigilance and caution when dealing with financial transactions and requests for personal information. By actively working together and reporting suspicious activities, we can contribute to the prevention and prosecution of such crimes, making our communities safer for all.
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