Three men were arrested in a scheme that allegedly used millions of dollars wired from China to fund seven homes in San Bernardino County that were used for illegal marijuana operations, federal officials announced Thursday.
The three men were arrested Thursday and charged with manufacturing, distributing and possessing with the intent to distribute marijuana.
They are expected to appear in United States District Court in Los Angeles on Thursday.
The defendants were identified as Lin Li, a.k.a. Aaron Li, 37, of Chino, Ben Chen, 42, of Alhambra, and Jimmy Yu, 44, of Pasadena.
Li, a real estate agent, is believed to be the U.S. coordinator of the alleged scheme; Chen allegedly looked over the marijuana grows and Yu was allegedly the second grow house caretaker, officials said.
After a 14-month investigation, search warrants were issued at Li’s home, along with the seven grow houses in Chino, Ontario and Chino Hills.
Authorities seized about 1,650 marijuana plants from the grow houses, and about $80,000 in cash from Li’s home.
Li is accused of purchasing homes through transactions that were designed to conceal the homes’ real owners, converting the houses into marijuana grow sites and selling the processed marijuana, mostly to customers in California and Nevada, officials allege in a 120-page affidavit.
“Li coordinated the purchase of the properties, managed them after purchase, paid their utilities and taxes, and established shell companies for the purpose of managing the properties’ finances,” the affidavit reads.
Investigators believe that Li tried to distance himself from the scheme by having Chen and Yu manage the daily operations at the grow houses and other aspects of the conspiracy, officials said.
Li allegedly used bypasses to divert electricity from power lines, creating fire risks in the neighborhoods. He even created fake leases for some of the properties and the documents also showed evidence of fake tenants, forged electronic signatures and special sections that supposedly prohibited the fake tenants from cultivating marijuana inside the homes.
Down payments for most of the homes were traced back to wire transfers from China, according to the affidavit, and several of them were bought by people who had nothing to do with the transaction, officials allege.
The affidavit describes how one such buyer, dubbed a “straw buyer,” bought a Chino Hills home for $782,000 in 2015. The supposed buyer was named as CEO of an LLC that Li had established, and that company received a $1 million wire transfer from a Hong Kong-based investment group. Most of the purchase price of the home was then wired from the LLC’s bank account, and Li received a commission check as the realtor for the sale.
The total purchase price for the seven homes, bought between 2013 and 2017, was $4,067,882.
In June 2018, San Bernardino Sheriff’s Department deputies seized 1,038 marijuana plants from an eighth grow house in Chino Hills that is believed to be a part of the scheme.
The U.S. Immigration and Customs Enforcement’s Homeland Security Investigations also assisted in the investigation.