Three L.A. County residents were sentenced to prison for laundering over $2.5 million in Target gift cards.
The trio was identified as:
- Blade Bai, 35, of El Monte
- Bowen Hu, 28, of Hacienda Heights
- Tairan Shi, 29, of Diamond Bar
After a 10-day trial in September 2023, all three were found guilty of scamming victims into buying gift cards under the false pretense of resolving various financial problems, according to the U.S. Attorney’s Office.
Between June 2019 and November 2020, prosecutors estimate over $2.5 million worth of gift cards were laundered.
The scheme involved a network of scammers calling victims and persuading them to buy one or more Target gift cards to rectify nonexistent issues. The targeted victims were often older adults, officials said.
During these calls, the suspects posed as law enforcement officers or government employees while telling the victims their identities had been stolen or warrants were issued for their arrest. Others were sent fake tech support emails claiming issues with the victims’ financial accounts.
They also posed as retail and tech support staff claiming issues with the victims’ accounts and falsely offering to fix the nonexistent issues.
To resolve these problems, the victims were asked to send payment in the form of Target gift cards, authorities said.
Victims were told to purchase the gift cards, often more than one and typically in increments of $500. They were told to read the card numbers and access codes over the phone to the fraudsters.
Using this method, a China-based scam group known as the “Magic Lamp” sold over 5,000 fraudulent gift cards to the trio through the messaging app, WeChat, court documents said.
The trio used WeChat to coordinate the distribution of gift cards to “runners” who quickly spent the funds at Target stores in Los Angeles and Orange counties. They purchased a variety of items including expensive electronics, other gift cards and more.
“The rapid transactions prevented victims from recouping the value on the cards when they contacted Target to report the scam,” authorities said.
“These defendants were part of a sophisticated, transnational fraud operation that targeted mostly older adults to cheat them out of their savings,” said U.S. Attorney Martin Estrada of the Central District of California. “Protecting our most vulnerable community members is critically important, and we will hold accountable those who reach into our country to engage in these sorts of egregious fraud schemes.”
Bai was found guilty of two counts of conspiracy to commit money laundering and was sentenced to 15 years in prison. He was ordered to pay $97,815 in restitution.
Bai was arrested in November 2020 on a criminal complaint involving this case and was released on bond. Within days of his release, authorities said he engaged in yet another money laundering scheme involving Target gift cards. He was arrested in February 2022 and has remained in federal custody since.
Hu was sentenced to 10 years in federal prison and ordered to pay $57,156 in restitution. Shi was sentenced to eight years and ordered to pay $39,416 in restitution.
One of the runners, Yan Fu, 60, of Chino Hills, pleaded guilty in September 2022 to one count of conspiracy to commit money laundering. He is serving a 20-month sentence in prison and was ordered to pay $48,073 in restitution.
“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 in the 2021 indictment. “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.”
Anyone who is age 60 or older and has experienced financial fraud can seek help by calling the National Elder Fraud Hotline at 1-833-372-8311.
To report a gift card scam, contact the FBI’s Internet Crime Complaint Center or the Federal Trade Commission. The public can also call 877-382-4357 or their local police department.