Three Californians found guilty of laundering $2.5 million in Target gift card scam

On Tuesday, Sept. 26, a jury convicted three San Gabriel Valley residents of defrauding older adults out of more than $2.5 million by convincing them to buy Target gift cards under false pretenses.

According to a news release from the US Attorney’s Office on Tuesday, Blade Bai of El Monte, Bowen Hu of Hacienda Heights, and Tairan Shi of Diamond Bar were all found guilty of one count of conspiracy to commit money laundering.

Bai, 35, was also found guilty of conspiring to commit money laundering, which he committed after being released on bond in the first case.

According to the U.S. Attorney’s Office, the scheme involved various overseas telephone scammers who lied to victims to persuade them to buy Target gift cards to fix nonexistent problems, including posing as law enforcement officers or government employees and claiming the victims’ identities had been stolen or warrants had been issued for their arrest. The con artists persuaded their victims that money in the form of Target gift cards was required to solve the problems.

Another method used by the scammers was to trick victims into responding to tech support emails posing as well-known companies and claiming problems with the victims’ financial accounts.

After purchasing the gift cards in $500 increments, the victims were instructed to read the card numbers and access codes to the scammers over the phone.

Bai, Hu, and Shi obtained over 5,000 gift cards from an unknown group of people in China known as the “Magic Lamp,” often on the same day that fraud victims purchased the gift cards. They then sold the gift card information via the WeChat online messaging app.

According to the US Attorney’s Office, the defendants also used WeChat to coordinate the distribution of gift cards to “runners,” who used the gift cards at Target stores in Los Angeles and Orange counties to purchase electronics, other gift cards, and other various items.

Yan Fu, 60, of Chino Hills, pleaded guilty to one count of conspiracy to commit money laundering in September 2022. Fu, who was one of the “runners” in this conspiracy, is serving a 20-month federal prison sentence. Fu was also ordered to pay restitution of $48,073.

The defendants and their co-conspirators attempted to conceal the fact that the gift cards were originally funded with fraudulent proceeds, and it is estimated that they laundered more than $2.5 million in gift cards between June 2019 and November 2020, according to the US Attorney’s Office.

Bai was arrested in November 2020 on a criminal complaint related to the scam and released on bond. Bai was arrested again in February 2022 on a superseding indictment after becoming involved in another money laundering conspiracy involving Target gift cards days after his release. Since his arrest, he has been held in federal custody.

Hu, 28, and Shi, 29, were arrested following the verdict on Tuesday.

The three defendants will be sentenced in federal court on January 26, 2024, and face a maximum sentence of 20 years in federal prison for each money laundering conspiracy count.