A jury in Los Angeles convicted three individuals for their roles in laundering proceeds of large-scale consumer fraud schemes through gift card transactions.
Blade Bai, Bowen Hu, and Tairan Shi were convicted of conspiracy to launder proceeds of wire fraud. Bai was also convicted of a separate money laundering conspiracy count.
As part of the scheme, fraudsters engaged in government-imposter scams and tech support scams. In a government-imposter scam, fraudsters contact consumers and impersonate government officials, such as officials with the Social Security Administration or local police officers.
The fraudsters falsely claim that victims need to purchase gift cards to resolve an issue, often claiming that the victims are subject to a pending arrest warrant or that the victims have a problem with their Social Security number.
In a tech support scam, fraudsters deceive victims into believing that there is a serious problem with the victim’s computer or with an online or mobile app account access and that the problem can only be resolved by paying substantial amounts through gift cards.
In this case, telephone scammers instructed victims to purchase gift cards from the retail store Target and provide the scammers with the account numbers and access codes listed on the gift cards.
The defendants then distributed the numbers assigned to the gift cards to “runners,” 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.
In one instance presented as evidence at trial, runners acting on behalf of the defendants redeemed gift cards that originated from a victim in Illinois approximately 13 minutes after the victim purchased the cards. 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.
A fourth defendant, Yan Fu, had previously pleaded guilty and was sentenced to 20 months in prison.
Bai, Hu and Shi are scheduled to be sentenced on Jan. 26, 2024.
HSI and the FBI Los Angeles Field Office, West Covina Resident Agency investigated the case. 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.
