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May 18, 2020Los Angeles, CA, United StatesContraband, Financial Crimes

Los Angeles-area real estate agent pleads guilty to coordinating multi-million-dollar scheme that funded marijuana grow houses

LOS ANGELES – A Chino real estate agent pleaded guilty today to a federal criminal charge for coordinating a scheme that used millions of dollars to purchase nine residential homes in San Bernardino County that were then converted into illegal marijuana grow houses.

Lin Li, a.k.a. Aaron Li, 38, pleaded guilty to one count of conspiracy to manufacture, possess and distribute at least 1,000 marijuana plants.

This case is the result of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Los Angeles and San Bernardino County Sheriff’s Department This case is being prosecuted in conjunction with the Organized Crime Drug Enforcement Task Force.

Between May 2013 and September 2017, Li facilitated the purchase by Chinese investors of nine residential homes in Chino, Chino Hills and Ontario. While exercising control over these properties, Li converted or allowed the conversion of the houses to marijuana grow operations. Li also admitted in his plea agreement that the conspiracy trafficked marijuana, with most of the processed marijuana being sold to customers in California, Nevada and New York.

Between October 2016 and September 2018, Li also created and signed false lease documents naming straw tenants for seven of the homes so they could be used to grow marijuana without being traced back to him or the other marijuana growers, according to Li’s plea agreement. Some of the false leases contained clauses prohibiting marijuana cultivation.

The down payments for most of the grow houses were traced back to wire transfers from China. The titles for most of the homes were transferred, shortly after they were purchased, to limited liability companies associated with Li, who served as the homes’ property manager.

Li and his co-conspirators physically diverted electricity directly from power lines, thus stealing power from the electric companies, hiding the grow houses’ high power usage from law enforcement, and creating fire risks in neighborhoods, according to court documents.

In early 2018, a neighbor complained to law enforcement about the “overwhelming” smell of marijuana coming from one of the Chino Hills homes and how no one seemed to live there, court papers state.

HSI special agents executed search warrants in 2018 and 2019 at Li’s home and the nine marijuana grow houses in San Bernardino County. As a result of the searches, agents seized approximately 4,342 marijuana plants and 91.72 kilograms of processed marijuana from the grow houses, as well as approximately $89,995 in drug proceeds from Li’s house.

The total purchase price for the seven homes, which were bought between July 2013 and September 2017, was $4,067,882, according to court documents.

Li also admitted in his plea agreement that these marijuana grows violated California law because they were not licensed to cultivate or sell marijuana, and all of the grow houses were in cities that prohibited commercial marijuana activity.

U.S. District Judge George H. Wu has scheduled a March 22, 2021 sentencing hearing. As a result of today’s guilty plea, Li faces a statutory maximum sentence of life imprisonment.

A second defendant in this case – Jimmy Yu, 45, of Pasadena, an alleged grow house caretaker – is scheduled to go to trial in this matter in February 2021.

Ben Chen, 43, of Alhambra, who also took care of the marijuana grows, pleaded guilty in May 2019 to one count of conspiracy to manufacture, distribute, and possess with intent to distribute marijuana. Chen is scheduled to be sentenced on August 17.

This case is being prosecuted by the U.S. Attorney for the Central District of California’s Criminal Appeals and Asset Forfeiture Sections.

Updated: 10/08/2020