An El Monte man and two Chinese nationals living elsewhere in Los Angeles County were sentenced Tuesday to terms in federal prison for laundering gift cards purchased by telephone-scam fraud victims at Target stores across the United States.
Blade Bai, 35, of El Monte; Bowen Hu, 28, of Hacienda Heights; and Tairan Shi, 29, of Diamond Bar were sentenced to terms of 15 years, 10 years, and eight years in federal prison, respectively, according to the U.S. Attorney’s Office.
U.S. District Judge André Birotte Jr. also ordered the defendants to pay restitution in the amounts of $97,815 for Bai, $57,156 for Hu, and $39,416 for Shi.
Bai has been in federal custody since February 2022. Hu and Shi were remanded into custody after the guilty verdicts against them were read in September in Los Angeles federal court.
“These defendants were part of a sophisticated, transnational fraud operation that targeted mostly older adults to cheat them out of their savings,” U.S. Attorney Martin Estrada of the Central District of California said in a statement.
“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.”
The defendants were part of a network of individuals who laundered proceeds of fraud stored on Target gift cards. Telephone scammers fraudulently induced victims across the country to buy gift cards, often $500 each, and to provide the card numbers and access codes to the scammers. The scammers included imposters falsely claiming to be police and other government personnel and retail and tech support impersonators falsely offering to fix nonexistent issues with the victims’ online account or computer.
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 messaging application WeChat.
The defendants used WeChat to coordinate the distribution of gift cards to “runners,” who used the 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.
Bai was arrested on a criminal complaint 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, according to court documents.
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 federal prosecutors. 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 around 90 cents on the dollar.
Law enforcement arrested Bai again in February 2022 on a superseding indictment.