Eight Chinese citizens living in New York and Canada were indicted by a grand jury on May 13 as part of an international fraud and money laundering conspiracy.
According to court documents, the alleged conspirators primarily targeted the elderly across the United States and Canada, generally through computer popups that would allege the victim’s computer was compromised, directing them to call a telephone number. Prosecutors with the U.S. Attorney for the Eastern District of New York allege the defendants perpetrated fraud on “at least hundreds of elderly persons.”
The investigation is ongoing, and victims have been identified in 37 states and multiple provinces in Canada.
According to the indictment, the alleged conspirators would tell the victims they were under investigation for criminal activity, that their banks had detected fraud, their personal information had been compromised, and/or the government was garnishing their bank accounts or assets.
After telling victims their accounts were not safe, the alleged conspirators would advise victims to pull their funds for safekeeping by a government agency or through cryptocurrency, and pose “as employees and representatives of banking institutions, government agencies, and other companies, including Apple, Inc., Microsoft Corporation, and Paypal.” Alleged conspirators also traveled to the homes of victims to collect cash or gold.
Grand jurors viewed evidence including texts between alleged conspirators about coordinating cash and gold pickups in the United States and Canada, and transferring the money to an alleged coconspirator’s bank account.
A resident of Cumming, Georgia, was advised by an alleged conspirator between April and May 2024 to purchase gold to protect his assets from fraud, and told that a courier would take it to the Federal Reserve Bank for safekeeping. Around May 22, 2024, one of the alleged conspirators picked up $99,504.61 worth of gold from the victim, according to the indictment.
Texts revealed alleged conspirators picked up $30,000 in cash from a victim in Palm Desert, California, on May 31, 2024; a bag of gold coins from a victim in Chestertown, Maryland, on July 26, 2024; $19,500 in cash from a victim in Bristol, Rhode Island, on or about July 26, 2024; $25,000 cash from a victim in Corona, California, on or about Aug. 5, 2024; $75,000 cash from a victim in Spring Hill, Tennessee, on or about Aug. 27, 2024; two kilograms of gold bars from a victim in Narragansett, Rhode Island, after several texts advising the victim to withdraw $30,000 in cash and later to purchase $130,000 and $160,000 in gold bars in August and September 2024; and two gold bars from a victim in Kailua, Hawaii, around Sept. 14, 2024.
The cash was allegedly deposited into bank accounts and cryptocurrency accounts, and the gold was allegedly sold with proceeds transferred into bank and cryptocurrency accounts.
Prosecutors said that at one point, $16 million was transferred into an account that did not have any known, legitimate source of income.
The alleged conspirators were charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.
Prosecutors allege Xiang Li, a Chinese citizen residing in New York, organized the network. He was arrested on May 13, and prosecutors have requested that he be denied bail, arguing Li is a flight risk and has a criminal record.
“Telegram messages between Li and other co-conspirators show that Li was responsible for updating the conspiracy members on the status of his couriers’ illicit activities; that he discussed counter-surveillance and means to avoid law enforcement detection; and that Li and his co-conspirators discussed the false names and passwords that the couriers should use when retrieving cash and gold from victims,” federal prosecutors wrote to U.S. Magistrate Judge for the Eastern District of New York Robert Levy.
“Li also was responsible for converting fraud proceeds into cryptocurrency and sending fraud proceeds, including via cryptocurrency transactions, to at least one of his co-conspirators.”
Prosecutors added that Li has been arrested previously, in New York in 2016 for promoting prostitution, to which he pleaded guilty to a lowered offense, and on Jan. 18 in New York for criminal possession of stolen property.
As a Chinese citizen, Li would not be subject to extradition should he flee to his home country, prosecutors argued, and faces substantial penalties, such as 20 years imprisonment and a fine that is double the amount defrauded if convicted.
