Five Chinese citizens are facing prosecution by the United States Department of Justice for their alleged involvement in a large-scale transnational fraud and money laundering scheme. This criminal scheme resulted in over 2,000 elderly victims being swindled, with losses exceeding $27 million.
According to the indictment and documents publicly released by the Department of Justice on Wednesday, the five defendants and their cohort based in India operated a transnational fraud ring that targeted elderly individuals across the United States.
Four of the defendants reside in Southern California, while one resides in Nevada. On Wednesday, approximately 60 federal, state, and local law enforcement officers conducted a joint operation in Henderson, Nevada, arresting Zhao Wang, 40, from Pomona, Jiandong Chen, 40, from West Covina, Jun Li, 40, and Xin Wang, 36, both from San Gabriel.
The fifth defendant, Youfei Gong, 29, from San Gabriel, was first arrested in his home on April 9th of this year.
Under U.S. law, if convicted of conspiracy to commit telemarketing fraud, the defendants could face up to 40 years in prison and a $1 million fine; and if convicted of money laundering, they could face a maximum of 20 years in prison, a $500,000 fine, or double the amount of the money laundered.
According to the FBI’s Internet Crime Complaint Center (IC3) latest annual report, the elderly are frequent victims of various scams, resulting in significant economic losses.
Among the many fraudulent schemes, “tech support scams” were the most reported type of fraud by the elderly in 2023. Scammers impersonate technical or customer support staff from banks, government agencies, and other institutions to deceive victims step by step. Additionally, common scams include “pump and dump,” investment fraud, and phishing schemes.
In this transnational fraud operation, the defendants utilized similar tactics. The indictment stated that the scammers contacted victims through pop-up ads, emails, and phone calls, compelling victims to contact the fraud call center located in India. Once victims made the call, scammers at the call center would use social engineering techniques to establish trust with victims and induce them to perform specific actions. In many cases, scammers directed victims to install remote desktop software for remote access to victims’ computers.
Once trust was established, scammers would use “tech support,” impersonate government and bank employees, or pose as refund staff from businesses to persuade victims to transfer money to their associates. The five defendants charged in this case were responsible for receiving and transferring the funds.
Scammers instructed victims to send cash via courier to locations in Southern California, Nevada, or conduct wire transfers directly. The defendants provided false names and addresses, collecting packages containing cash using fake IDs from locations such as CVS Pharmacy.
According to the indictment, the defendants specifically targeted the elderly. After obtaining the victims’ money, the defendants transferred the proceeds to their Indian accomplices through cryptocurrency transactions.
The indictment referenced a text message from Xin Wang in August 2023, stating, “All I have to do is use a fake ID to pick up a package from CVS, the package contains cash, then ‘launder’ the money and hand it over to the fraud group in India. My boss can scam over a million dollars every week.”
FBI revealed close communication between the U.S.-based defendants and their Indian counterparts. Special agents confirmed around 2,000 victims falling prey to the fraud between 2021 and 2023, with total losses exceeding $27 million. The indictment indicated that this large-scale transnational fraud continued until June 2024.
“Every day, scammers deceive unsuspecting elderly individuals, tricking them out of their hard-earned savings,” said U.S. prosecutor Tara McGrath. “We urge everyone to exercise caution and seek advice from family and friends before sending money to strangers they only know through phone calls, texts, or online.”
The operation to combat transnational fraud was carried out jointly by the FBI, nearly 10 different local police departments, and a task force. FBI stated its commitment to continuing cooperation with law enforcement agencies to prevent and dismantle all organized fraud syndicates.