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Document and Benefit Fraud
08/09/2010

Chinese nationals charged in LA-area prostitution probe

LOS ANGELES - Four Chinese nationals are in custody following their arrest over the weekend on federal and state charges for their involvement in the operation of two brothels in Monterey Park, Calif., and San Gabriel, Calif., that recruited and employed female Chinese nationals to work as prostitutes.

The defendants, Jian Guo, aka "David," 42, of Arcadia, Calif., Huagui Lotto, aka "Candy," 53, of Rowland Heights, Calif., Lotto's husband, Phillip Fu, 47, of Rowland Heights and Yibin Zhang, 45, of Monterey Park were arrested Saturday evening by agents with U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI). The arrests followed the execution of search warrants at the two brothel locations, the defendants' residences, and a private residence occupied by the brothels' female employees. Officers from the Monterey Park and San Gabriel Police Departments assisted with the enforcement action.

Lotto, the alleged manager of the Monterey Park brothel, and Zhang, who purportedly served as an enforcer and part-time manager at the business, are charged in a federal criminal complaint with conspiracy to import and harbor aliens for prostitution. Fu, the establishment's alleged overseas recruiter, is charged in a federal criminal complaint with conspiracy to commit marriage fraud. The Los Angeles County District Attorney's Office filed a felony complaint charging Guo, the alleged manager of the San Gabriel location, with pimping and pandering by procuring and keeping or residing in house of ill fame.

During the operation, one female Chinese national believed to be employed by the defendants was taken into ICE custody on immigration violations.

The enforcement actions are the result of a nine-month investigation by ICE HSI into a far-reaching prostitution enterprise that advertised primarily through word of mouth and personal referrals. Court documents allege the defendants engaged in various types of immigration fraud to recruit their female employees -- many of whom had valid student visas -- including using fake documents and setting up fraudulent marriages.

According to a case affidavit, Fu told U.S. Customs and Border Protection officers at Los Angeles International Airport in May that he was returning from a six-week trip to China to set up his business -- a cultural exchange that recruits underprivileged Chinese students to study in the United States. When officers searched Fu's effects, they discovered identification documents, money transfer receipts and bank statements that did not belong to him.

"Illegal ventures like this degrade the quality of life in our neighborhoods as well as the women involved," said Claude Arnold, special agent in charge of ICE's office of Homeland Security Investigations in Los Angeles. "ICE will continue to work closely with its law enforcement partners to attack and dismantle these kinds of enterprises that prey on the vulnerable and often bring other criminal activity into the area."

In addition to the arrests, Saturday night's enforcement action led to the seizure of two vehicles -- a Lexus GX 470 and a Mercedes Benz ML 500, valued separately at $21,000 each; $9,419 in cash, five government stamps from the Republic of China and an unregistered pistol.

The charge of importing and harboring an alien for purposes of prostitution carries a maximum penalty of ten years in prison. Conspiracy to commit marriage fraud is punishable by up to five years in prison. The state charges - both of which call for mandatory state prison commitment upon conviction -- carry a maximum sentence of seven years and four months.