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Sixteen Named in Racketeering Indictment Alleging Money Laundering Schemes Orchestrated by Former President of Orange County Bank
Two Other Money Laundering Indictments Unsealed as Part of Operation "Phantom Bank"
Federal authorities today arrested 11 defendants named in a sweeping racketeering indictment alleging a series of money laundering schemes that revolved around the former head of Saigon National Bank, based in Westminster, California, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department's Criminal Division and U.S. Attorney Eileen M. Decker of the Central District of California. Four other defendants, who are named in separate indictments, were also arrested today.
The majority of the defendants arrested today are named in a racketeering indictment that was returned on Dec. 1 by a federal grand jury and unsealed today along with two other indictments returned by the grand jury over the past year. The three indictments charge a total of 20 defendants.
Six of the defendants named in the main indictment are charged with violating the federal Racketeer Influenced and Corrupt Organizations Act (RICO) by playing key roles in a series of schemes to launder drug proceeds. At the center of the schemes is Tu Chau "Bill" Lu, 71, of Fullerton, California, who from 2009 through January 2015, was president and CEO of Saigon National Bank.
The indictment alleges that Lu and the other five defendants were members of a criminal organization that was involved in narcotics trafficking and international money laundering in countries that included the United States, China, Cambodia, Liechtenstein, Mexico and Switzerland. Lu allegedly used his insider knowledge, position as an official at Saigon National Bank and network of connections to promote and facilitate money laundering transactions involving members and associates of the enterprise. Several members of the organization established or engaged in separate money laundering schemes, but all of the defendants allegedly worked with Lu, through him or at his direction.
In one scheme, an undercover informant delivered cash represented to be drug proceeds to defendants, who allegedly arranged for the cash to be converted into cashier's checks made out to a company the informant claimed to own. Other conspiracies alleged in the indictment also involved the delivery of cash from the informant and the defendants' alleged conversion of that money into cashier's checks.
As part of the racketeering enterprise, Lu and others named in the RICO count allegedly floated a plan in which the informant and his boss (who was an actually an undercover law enforcement officer) would purchase a controlling interest in Saigon National Bank so they could have a financial institution that could easily facilitate money laundering operations.
In another aspect of the racketeering conspiracy, Lu and others allegedly proposed setting up a foundation in Liechtenstein that would be used to move money around the world. The informant and an undercover law enforcement officer posing as an associate told those proposing the creation of the foundation that they would be laundering the proceeds of drug sales in Europe and that the drugs had been bartered for weapons in Nigeria.
In yet another aspect of the conspiracy, Lu allegedly played a critical role in introducing the informant and other defendants to operatives from the Sinaloa drug cartel who wanted to launder millions of dollars every month. According to the indictment, Lu had also discussed purchasing Saigon National Bank with the Sinaloa operatives, and one of the operatives said the cartel had already invested $1 million in the bank.
The five other individuals charged in the RICO count are:
- Tsung Wen "Peter" Hung, 61, of Monterey Park, California;
- Edward Kim, 56, of Beverly Hills, California;
- John Edmundson, 55, a British citizen who resides in Hong Kong, who is still being sought by authorities;
- Pablo Hernandez, 75, of Tijuana, Mexico, who is still being sought by authorities; and
- Emilio Herrera, 53, a Mexican citizen who resides in Spring Valley, California, who is still being sought by authorities.
The RICO count is one of 28 counts in the indictment. The various money laundering schemes detailed in the RICO count are the subject of other charges, specifically conspiracy, money laundering and structuring transactions to avoid federal reporting requirements. Kim is additionally charged with evidence tampering for allegedly encouraging one of the undercover agents to destroy evidence.
The indictment alleges that members of the racketeering conspiracy discussed laundering hundreds of millions of dollars. The indictment details actual money transactions involving a total of $3.75 million.
The other defendants named in the indictment are:
- Mina Chau, 32, of La Mesa, California;
- Ben Ho, 41, of Santa Ana, California;
- Tom Huynh, also known as The Fat Guy, 57, of Westminster;
- Renaldo Negele, 51, of Liechtenstein, who is still being sought by authorities;
- Jack Nguyen, 38, of Manhattan Beach, California;
- Luis Krueger, 58, of Malibu, California;
- Li Jessica Wei, who is also known under various permutations of her name, including Wei Jessica Li, 58, of Arcadia, California;
- Du Truong "Andrew" Nguyen, 34, of Westminster, who is still being sought by authorities;
- Richard Cheung, also known as Richard Cheang, 58, of El Monte, California; and
- Lien Tran, 41, of Santa Ana.
The second indictment unsealed today charges Hung; Wei; Jian Sheng "Raymond" Tan, 48, of Temple City, California; and Derrick Cheung, also known as Chang Zhang Ying and Zhang Ying Chang, 39, of Rowland Heights, California, with conspiring to launder money that they believed to be the proceeds of narcotics trafficking and bank fraud. The defendants allegedly accepted money from an undercover operative and converted it to cashier's checks and money orders, in exchange for a fee.
The third indictment unsealed today charges Tan; Ruimin Zhao, 45, of Temple City; and Vivian Tat, of Hacienda Heights, California, with conspiring to launder money that they believed to be the proceeds of narcotics trafficking. An undercover operative allegedly delivered the money to the defendants, who converted into cashier's checks.
The 15 defendants taken into custody today will be arraigned this afternoon in U.S. District Court in Los Angeles.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The FBI, the Office of the Special Inspector General for the Troubled Asset Relief Program and Internal Revenue Service-Criminal Investigation are conducting the investigation in Operation Phantom Bank. Trial Attorney Andrew Creighton of the Criminal Division's Organized Crime and Gang Section and Assistant U.S. Attorney Kim Meyer of the Central District of California are prosecuting these cases.
[Source: DOJ, Office of Public Affairs, Criminal Division, USAO California, Central, Washington, 10Dec15]
Corruption and Organized Crime
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