USA: Jail for laundering "gift cards" purchased by victims of telephone frauds

News Desk

A California man and two Chinese nationals were sentenced today to 15, 10 and eight years in prison, respectively, for laundering so-called "gift cards" purchased by telephone-scam fraud victims at Target stores across the United States in an international scheme.

Blade Bai, 35, of El Monte, Bowen Hu, 28, of Hacienda Heights, California, and Tairan Shi, 29, of Diamond Bar, California, were part of a network of individuals who laundered proceeds of fraud stored on Target gift cards. Telephone fraudsters induced victims across the country to buy gift cards, often USD500 each, and to provide the card numbers and access codes to the fraudsters which included imposters falsely claiming to be police and other government personnel and retail and tech support impersonators falsely offering to fix non-existent 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 funnelled the gift cards to “runners” to liquidate at Target stores in southern California. Those runners, at the defendants’ direction, would quickly use the cards to purchase high-value consumer electronics and conduct other transactions. The rapid transactions prevented Target from recouping the value on the cards for the original victim-purchasers.

A jury convicted the defendants of a money laundering conspiracy that spanned from approximately June 2019 to November 2020. The jury also convicted Bai 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, California, pleaded guilty and was previously sentenced to 20 months in federal prison.