Yezhou Zhao and Sheng Qiang from China were charged with a five year, 25-Count indictment by the United States District Attorney’s office after being found guilty by a grand jury in the San Jose Northern Districts San Jose Division of the US District Court.
The couple is being charged with 18 USC §371 – Conspiracy to Commit Wire Fraud, §§ 1341 – Mail Fraud; Aiding and Abetting, §1956 (h) Conspiracy to Commit Money Laundering, §1957 (a) Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, and §1956 (a) (2) (B) (i) International Money Laundering to Conceal Illegal Activity; Aiding and Abetting.
Jack Gillund with the Northern District of California U.S. Attorney’s Office said, “The next court hearing will be on February 25, 2013 for further case status.” In matters working with different agencies involving International Wire Fraud, The United States Postal Service, Homeland Security Investigators, and the International Revenue Service may all be involved in bring charges against individuals for a Felony crime of $10,000 dollars or more.
A Stipulation Order for the detention of Sheng Qiang, aka Becky Qiang, was issued on August 18, 2012. However her husband Yezhou Zhao, aka Jake Zhao, was arrested in China and was being returned to the United States for sentencing.
Restitution is being asked in the case due to the amount in controversy from a grand jury indictment of the couple in the earlier part of the year in 2009. Penalties resulting in the acts of money laundering to conceal an illegal act, while concealing illegal activity through international money laundering, ranges from of 5-years to 20-years in federal prison.
On or about the 15th of July 2009, Zhao and Qiang filed fictitious business names with the Santa Clara County Recorder’s Office. The list of names the couple filed included: Hotlinx Inc., T-Zone Micro, CTrip Express, Tazon International, Look Smart, Jason Consulting, Yo Yo Web, AAA Eshopping, TMarks Inc., Milo Corp., and Big Web Sense. The couple then established bank accounts under the fictitious names. As part of their scheme the couple set up accounts to participate in a rebate scheme. When setting up an account in a bank you must also provide your personal identifiable information in order to identify the account holder.
Most thieves rely on accounts that have a deposit and withdrawl system to manipulate the numbers. Having information that leads to the account information is required under the Federal Deposit Insurance Corporation (FDIC) and Securities and Exchange Commission (SEC). Using methods that require a onetime withdrawal can help reduce the risk of fraud and abuse from an account holder who may be subject to embezzlement from an employee or relative. which occurs in most elder and fraud abuse cases.
As part of a “3Com” rebate scam, the individuals would send invoices, starting with a low number of $3,598.20 on Aug 28 of 2003, increasing the amount to more than $11,990 in 2006. Zhao and Qiang had eventually scammed 3Com for more than $67,194.95 by Jan of 2008. China-based Huawei Technologies and 3Com generated sales from Europe, Asia and America before it was fully dissolved on April 12, 2010, when Hewlett-Packard purchased 3Com. 3Com produced telecommunication network systems and sold them throughout Europe, Asia, and the United States.
International accounts were opened to conceal the illegal activity. Two accounts totaling more than $269, 485 were transferred from Union Bank of California to the Lung Cheung International Trading Co. account at Bank of China (Hong Kong) Ltd., and Hong Kong Co. Ltd. Shanghai Banking Corp. China Ltd. in Shanghai, China.
Acting together, “Jake” and “Becky” opened private rental mail boxes, receiving rebate checks acquired through fraudulent submissions, requesting rebates from 3Com for communications equipment that was falsely claimed in a “Trade-Up-Program” which provided incentives for upgrades using its telecommunications system products.