A federal grand jury indictment returned this week charges two Chinese nationals with operating an illegal money transfer business that moved funds from the China to the United States, in some cases using proceeds of romance scams to provide money to their U.S.-based customers.
A four-count superseding indictment filed Wednesday charges two people currently being sought by the FBI. The new indictment, which supersedes an indictment filed in 2018, charges both defendants with conspiracy to operate an unlicensed money transmitting business and witness tampering offenses.
The defendants in this case are Dianwei Wang, 31, and Zhili “Ethan” Song, 36, both of whom previously resided in West Covina. Wang and Song are fugitives.
Wang and Song allegedly operated an “informal value transfer system” (IVTS), which the indictment describes as “a network of people who would receive funds from a customer in one location for the purpose of making roughly equivalent funds available (minus a fee) to the customer in another location, often in a different country.” An IVTS can be known by various names, including “fei ch’ien” in China and “hawala” in the Middle East.
As part of the scheme alleged in the indictment, Wang and Song told their IVTS customers to deposit money into Chinese bank accounts they controlled or had access to with a promise that the money – minus their fee – would be deposited into accounts their customers designated in the United States.
Over the course of about eight months in 2017, Wang and Song transferred or attempted to transfer approximately $2 million from China to the United States for their IVTS customers, the indictment states.
“To fulfill their agreements to provide U.S. dollar-denominated funds to the IVTS customers in the United States, defendants Wang and Song would use funds they obtained from third parties, including romance scam victims,” according to the indictment.
Wang allegedly directed people associated with the online scammers to send him checks or wire him funds derived from romance scam victims, most of whom were older adults. In some cases, Wang allegedly directed the people associated with scammers to have victims send checks directly to him.
Over a six-month period in 2017, in 22 transactions detailed in the indictment, Wang and Song caused romance scam victims to send nearly $1.1 million to them or to their IVTS customers.
Wang and Song also allegedly lied to the FBI in late 2017 when they were asked about wire transfers to a Chinese national residing in Southern California. Both defendants are charged with conspiracy to obstruct justice for telling the third Chinese national to falsely tell the FBI that she was buying a house with Wang as a way of explaining the wire transfers and supporting their own false statements to FBI agents. Counts three and four in the indictment separately charge Wang and Song with witness tampering.
More than $450,000 in funds seized from accounts associated with the third Chinese national are the subject of a pending civil asset forfeiture proceeding.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The charge of conspiracy to operate an unlicensed money transmitting business carries a statutory maximum sentence of five years in federal prison. The obstruction of justice and witness tampering charges each carry a maximum penalty of 20 years in federal prison.
The FBI previously seized approximately $1.9 million from accounts controlled by Wang, Song and other Chinese nationals. No claims were made on approximately $376,000 seized from Wang’s accounts, and that money has been forfeited to the United States. The United States intends to seek forfeiture of the remaining funds.
The FBI is investigating this matter.
Anyone with information concerning the whereabout of Wang or Song should call their local FBI office, or the nearest U.S. embassy or consulate. In Los Angeles, the FBI can be reached at (310) 477-6565.
Romance scams occur when a criminal adopts a fake online identity to gain a victim’s affection and trust. The scammer then uses the illusion of a romantic or close relationship to manipulate and/or steal from the victim. Some romance scam victims become witting or unwitting participants in other scams, by agreeing to receive money into their accounts and transfer the money to third parties as directed by their scammer contact. Never send money to, or receive and transfer money for, anyone who has only communicated with you online or by phone. If you or someone close to you may be caught in a romance scam, stop sending money and report the activity to the Internet Crime Complaint Center (www.ic3.gov) or the FBI.
Assistant United States Attorney Monica E. Tait of the Major Frauds Section is prosecuting the criminal case, and Assistant United States Attorney Katharine Schonbachler of the Asset Forfeiture Section is handling the forfeiture matters.