LOS ANGELES
An El Monte man and two Chinese nationals living elsewhere in Los Angeles County were sentenced Tuesday to federal prison for laundering gift cards purchased by telephone scam fraud victims at Target stores across the United States, according to officials.
Blade Bai, 35, of El Monte; Bowen Hu, 28, of Hacienda Heights; and Tairan Shi, 29, of Diamond Bar, were sentenced to 15 years, 10 years, and 8 years in federal prison, respectively.
U.S. District Judge André Birotte Jr. also ordered the defendants to pay restitution 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 2023.
“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.”
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 card numbers and access codes to the scammers.
The scammers included government 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.
The defendants acquired more than 5,000 gift card numbers and access codes from a group in the People’s Republic of China calling itself the “Magic Lamp” and funneled the gift cards to “runners” to liquidate at Target stores in Southern California.
At the defendants’ direction, those runners would quickly use the cards to purchase high-value consumer electronics and conduct other transactions. The rapid transactions prevented victims from recouping the value of the cards when they contacted Target to report the scam.
At the conclusion of a 10-day trial in September 2023, a jury found the defendants guilty of a money laundering conspiracy from approximately June 2019 to November 2020.
The jury also found Bai guilty of a second money laundering conspiracy, in which he enlisted an associate to help sell a batch of gift cards with fraudulent proceeds after his initial arrest in the case.
One of the defendants’ main “runners,” Yan Fu, 61, of Chino Hills, pled guilty and was previously sentenced to 20 months in federal prison.
The Los Angeles Field Offices of Homeland Security Investigations and the FBI investigated the case.
Assistant U.S. Attorney Monica E. Tait of the Major Frauds Section and Trial Attorneys Wei Xiang and Meredith B. Healy of the Justice Department’s Consumer Protection Branch prosecuted the case.
If you or someone you know is age 60 or older and has experienced financial fraud, experienced professionals are standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).