A citizen of China wanted by the U.S. Department of Justice was arrested in Honolulu for his alleged role in a traveling conspiracy to steal more than $175,000 from gift cards taken from 63 different grocery stores in two states.
Gunn Len Wong, 51, aka Junnuan Huang, was arrested for a second time on Saturday in connection with a May 21 arrest warrant issued out of East St. Louis, Ill. He is scheduled for a detention hearing today. It was unclear why Wong was in Honolulu at the time of his arrest.
Wong, Sifeng Zheng, also a citizen of China, and other alleged co-conspirators, whose names are redacted, are charged in an indictment secured Wednesday.
A third man, Bangxuan Li, was arrested with Wong and Zheng by police in Missouri in January but has yet to be charged by federal prosecutors. The trio was allegedly found with more than 800 gift cards worth about $175,000 by police officers who pulled a car over in connection with the case.
Zheng was arrested in California in May as part of the federal case.
According to Homeland Security Investigations, “organized criminal elements in China” acquire gift cards through multiple fraudulent means.
“Recently, criminals have been increasingly using sophisticated methods to tamper with gift cards and exploit online vulnerabilities,” HSI said in a January news release. “Chinese organized crime groups are combining key characteristics of organized retail crime, victim assisted fraud, and trade-based money laundering to commit gift card fraud.”
Wong and Zheng are charged with conspiracy to commit access device fraud along with at least one other citizen of China. An indictment in the case was returned Wednesday, according to federal court records.
From Dec. 14, 2024, until Jan. 23, Wong, Zheng and other citizens of China allegedly pulled off their scam at 63 different Schnucks grocery locations in the southern district of Illinois.
Wong, Zheng and the unnamed co-conspirators allegedly stole unactivated gift cards from the grocery store shelves. The men are accused of scratching off the stickers on the back of the gift cards that hide the account and personal identification numbers and writing the numbers down. They then allegedly “placed a sticker back on the gift card to conceal that the gift cards had been tampered with,” according to federal court records.
The men then allegedly took the cards and returned to other Schnucks grocery stores and put them on the shelves.
The alleged fraudsters used the account numbers and the PINs to monitor the activity on the gift cards online.
“When a paying customer put money on the card, (Wong, Zheng and others) used the funds on the gift cards before the customer could use them,” wrote Assistant U.S. Attorney Kathleen M. Howard.
Wong, Zheng and the unnamed co-conspirators allegedly stole the gift cards from Schnucks locations in Illinois and Missouri.
According to a probable cause statement from the St. Louis County Police Department, Wong and Zheng on Jan. 17 entered a Schnucks on the 4300 block of Butler Hill Road and repeatedly passed by a rack holding various gift cards, Fox 2 Now of St. Louis reported Oct. 29.
According to St.Louis police, Wong and Zheng allegedly stole 30 gift cards from the rack while in the store and replaced them with 25 gift cards that had previously been tampered with, the station reported.
Police officers say they found Wong and Zheng in a car with about 800 gift cards divided and labeled with sticky notes and recorded in a ledger. Officers secured surveillance footage from the Schnucks location and identified Wong and Zheng in the video, the television station reported.
“It does appear that it’s a part of a bigger, possibly traveling theft ring,” Wentzville Police Department Public Information Officer Sgt. Jacob Schmidt told the TV station in January.
“Gift card fraud has become a growing concern for consumers and businesses alike. Under Project Red Hook, HSI is teaming up with our law enforcement partners and businesses to raise awareness of how Chinese organized crime groups are exploiting gift cards to launder money,” HSI said in a news release Jan. 23. “Gift card draining techniques not only affect retailers, but also our Nation’s economy and jeopardize our Nation’s national security and public safety.”
HSI’s “Project Red Hook” specifically targets Chinese organized crime groups due to the “cross-border nature of the crime.” Chinese organized crime groups allegedly use the stolen funds to finance fentanyl production smuggling and illegal migration, and human trafficking, according to HSI.
“Gift card fraud perpetrated by Chinese organized crime groups is spreading across the globe and can be attributed to losses in the hundreds of millions of dollars” HSI cautioned.
Coordinated cases of retail gift card thefts by citizens of China were found in California,Washington, Oregon and Nevada during the 2024 holiday shopping season.
In a Nov. 14 news release from the Sacramento County Sheriff’s Office’s Organized Retail Crimes Task Force, the Elk Grove Police Department, Sacramento County District Attorney’s Office, and U.S. Department of Homeland Security, four people from China allegedly “victimized more than 100 retail locations” targeting grocery stores and hardware stores where gift cards were openly displayed.
Law enforcement seized 7,000 tampered gift cards and found a hotel room that had been converted into a gift card tampering and shipping facility, according to the release.
“As with the previous cases in Sacramento County involving gift card tampering (December 2023 & August 2024), all four suspects, Jian Chen, Qiang Xue, Chunliang Fang, Xuewei Yu, are citizens of the People’s Republic of China who traveled to Central America and entered the United States of America illegally by crossing the southern border with Mexico within the last 18 months,” read the November 2024 news release.
Source: The Garden Island