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Financial Crimes
07/22/2011

2 arrested on federal charges for allegedly using counterfeit credit cards to buy high-end electronics

LOS ANGELES - Two Chinese nationals from the Los Angeles area made their initial appearance in federal court here Friday afternoon following their arrest on charges stemming from their role in a retail theft ring that used counterfeit credit cards to buy high-end electronics from Wal-Mart stores throughout the Los Angeles area.

Renjie Huang, 51, of Alhambra, Calif., and Yong Xu, 25, of Monterey Park, Calif., were taken into custody Friday morning by federal agents. The men are charged in a 10-count indictment handed down July 1 with conspiring to use and traffic in counterfeit devices and using counterfeit access devices. The charges carry a maximum penalty of 15 years in prison. At their Friday afternoon court appearance, Huang and Xu both pleaded not guilty to the charges in the indictment. The men were ordered held without bond pending a trial that is scheduled for September 13.

Friday's arrests are the latest development in a long-term investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the U.S. Postal Inspection Service (USPIS), and the U.S. Secret Service (USSS).

Earlier this year, federal agents arrested a third defendant in the case, 28-year-old Gong Xu, of Alhambra, Calif., no relation to Yong Xu. Xu was taken into custody January 21 and pleaded guilty in April to unauthorized use of an access device. Gong Xu's sentencing is set for July 25. He faces a maximum penalty of 10 years in prison.

According to the case indictment, the theft ring has been active since at least last summer. The investigation revealed the defendants used counterfeit credits cards produced in China, along with stolen credit card information, to purchase expensive high-end electronics from Wal-Mart stores throughout Southern California. The electronics included iPods, laptop computers, cameras and Nintendo Gameboys. The indictment notes that when Gong Xu was arrested earlier this year, he was in possession of a list Wal-Mart stores, along with credit card numbers belonging to nearly 200 credit cards holders in the U.S. and overseas.

"We believe this theft ring is responsible for close to a half million dollars in financial losses," said Claude Arnold, special agent in charge for ICE HSI in Los Angeles. "These kinds of scams cause incalculable harm to both retailers and consumers. We need to send a message to those who perpetrate such rip offs that they will likewise pay a price."

"Individuals who use the U.S. Mail to perpetuate their criminal enterprises, including victimization of the American retail and banking sectors, will be aggressively pursued by postal inspectors," said B. Bernard Ferguson, inspector in charge for the Los Angeles Division of USPIS. "We are committed to working with our law enforcement partners in these investigations."

"This is another example of several federal agencies collaborating to come to a positive and successful outcome in a joint investigation," said Jim Kollar, assistant special agent in charge of the USSS Los Angeles Field Office. "The Secret Service is committed to continuing the efforts with our federal partners to combat these types of crimes in the Los Angeles Metropolitan area."