Pasadena Man Arrested in Alleged Scheme to Buy Homes, Convert Them Into Marijuana Grow Houses

Published : Thursday, March 7, 2019 | 2:23 PM

A 44-year-old Pasadena man was arrested with two other men Thursday morning after federal authorities uncovered an alleged scheme where millions of dollars in funds wired from China were reportedly used to buy at least seven homes in San Bernardino County and convert them to illegal marijuana grow houses.

The Pasadena resident, Jimmy Yu; Lin Li a.k.a. Aaron Li, 37 of Chino; and Ben Chen, 42, of Alhambra, were arrested on federal charges after a 14-month investigation initiated by the San Bernardino County Sheriff’s Department and later pursued by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).

The complaint charged the three men with one count of manufacturing, distributing, and possessing marijuana with the intent to distribute, according to a statement from the U.S. Attorney’s Office for the Central District of California.

Yu was named in the statement as one of two caretakers of marijuana grow houses in Chino, Ontario and Chino Hills that were purchased under the scheme. Yu, Li and Chen were expected to make their initial appearances Thursday afternoon in United States District Court in Los Angeles.

Law enforcement agents also searched Li’s home and the seven marijuana grow houses. Authorities seized about 1,650 marijuana plants and cash estimated to be at least $80,000 as a result of the searches.

The U.S. Attorney’s Office has taken steps to forfeit the seven homes where marijuana was being grown, estimated to be worth more than $5 million, authorities said.

The complaint did not mention whether or not any properties in Pasadena were purchased as part of the scheme.

A 120-page affidavit in support of the criminal complaint said Li, who worked as a real estate agent, orchestrated a scheme that purchased the residential properties, converted them to marijuana grow operations, and trafficked marijuana.

Li allegedly received financing from sources in China and acted as realtor for the purchase of the residences. Li also managed the properties, paid for utilities and taxes, and “established shell companies for the purpose of managing the properties’ finances,” the affidavit said.

Investigators believe Li attempted to conceal his role by using Yu and Chen to manage the day-to-day operations at the grow houses, distribute marijuana out of state, and collect and return sale proceeds.

The complaint said Li also diverted electricity directly from power lines and stole power from the electric companies to hide the high power usage from law enforcement, and created fire risks in the neighborhoods where the grow houses are located.

Li also created fake leases for some of the properties and documents that included fake tenants, and forged electronic signatures and special clauses purporting to prohibit the fake tenants from cultivating marijuana at the homes.

“In states that have decriminalized marijuana, we have seen an influx of foreign money used to establish grow operations, with much of the marijuana being destined for out-of-state consumers,” U.S. Attorney Nick Hanna said in the statement. “By establishing illegal drug operations in residential neighborhoods, the defendants increased the risks to law-abiding homeowners, caused neighborhood blight, and stole power from utilities.”

Joseph Macias, Special Agent in Charge for HSI Los Angeles, said they and their law enforcement partners will continue to target transnational criminal organizations that attempt to use U.S. neighborhoods as locations for criminal activity.

“Today’s arrests and searches, coordinated jointly with the San Bernardino Sheriff’s Department and the U.S. Attorney’s office, are the next step in shutting down criminals who would trash our communities for their own greed,” Macias said.

The affidavit showed down payments for most of the grow houses were traced back to wire transfers from China, and several of the properties were bought by “straw buyers” who actually had nothing to do with the transaction.

The titles for most of the homes were transferred shortly after they were purchased to limited liability companies associated with Li, the affidavit said.

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

 

 

 

 

 

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