Online fraudsters confess to Walmart gift card scam run from China

Two US residents with criminal connections in the Asian superstate have pleaded guilty to their part in a complex international scam that conned hundreds of American citizens out of their money.

Wen and Yao Lin, of Pennsylvania and Virginia respectively, admitted to US Secret Service (USSS) agents investigating the case that they had each cooperated with unidentified contacts in China, who used smartphone apps to send them gift card code numbers that the two men then used to make purchases from Walmart stores across the southern states.

It is not known if Wen and Yao, who do not appear to be related and were investigated separately, acted in concert with one another at the behest of a single criminal entity in China, or if they were affiliated with two separate gangs based there that were simply running the same type of scam.

The gift cards used by both men had been obtained by China-based cybercriminals through various fraudulent means, including romance scams, social engineering attacks to convince victims they faced criminal charges, and bogus offers of computer protection.

Targeting the vulnerable

All of these tricks were purposed to persuade vulnerable US citizens to purchase digital gift cards and send them to their attackers, who then passed them on to Wen and Yao. The two accomplices confessed to agents that they had agreed to use the card details to purchase goods from Walmart stores and send them back to the original fraudsters in return for a 3% cut of the takings.

Wen and Yao deny knowing that the card codes had been extorted from victims, but such claims of ignorance are unlikely to get either one off the hook, and each now faces up to 20 years in prison and a fine of $1 million. They are due to be sentenced later this year by a district court in Georgia, where the case was heard.

“These investigations clearly show how foreign actors pray on American victims,” said USSS agent Clint Bush. “The international fraudsters operated numerous fraud schemes to convince American victims to purchase gift cards [and] utilized their foreign connections within the United States to ‘cash out’ the gift cards purchased by victims of fraud.”

Illegal spending sprees

Wen was arrested at a Walmart store in Hazlehurst, Georgia, in 2019, after a three-day shopping spree using the app-delivered cards, which carried a face value totalling $229,000. At the time of his arrest, he had managed to spend all but $40,000.

The ill-gotten money Wen was spending were supplied by victims of his accomplices in China, who in one case convinced a man there was a warrant out for his arrest, which could only be overturned if he sent gift cards to the scammers.

Yao was found to have racked up $533,000 in illegal transactions using more than 1,200 Walmart cards before being taken into custody in Valdosta, Georgia, in 2021.

One of the victims who unwittingly contributed to this haul was an elderly woman from Texas who was persuaded to purchase a fake computer protection program using gift cards, which she passed on to the scammers in China. Another was the case of an elderly man duped into sending $5,000 worth of cards to another scammer posing as a woman, presumably a potential love interest.

“Fraudsters, both here and abroad, are relentless in their efforts to scam unsuspecting people,” said US attorney Peter Leary. “I hope this case reminds all of us to be alert to the growing number of financial scams out there, and report incidences of fraud to the authorities.”

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