LOS ANGELES >> A group of travel agents has been charged with running illicit “birth tourism” schemes across Southern California that allegedly brought hundreds of pregnant Chinese clients to the U.S. illegally so they could deliver their children on American soil, according to court records made public today.
The charges are the culmination of a long-running investigation by agents from the Department of Homeland Security and the IRS into three outfits operating for years in Los Angeles, the Inland Empire region and Orange County that charged as much as $100,000 for their clandestine services — a price tag authorities say Chinese parents-to-be readily paid to make sure their children would be citizens of what one company’s brochures called the “most attractive nationality.”
“These cases allege a wide array of criminal schemes that sought to defeat our immigration laws — laws that welcome foreign visitors so long as they are truthful about their intentions when entering the country,” U.S. Attorney Nick Hanna said in a statement. “Statements by the operators of these birthing houses show contempt for the United States, while they were luring clients with the power and prestige of U.S. citizenship for their children.”
Arrested this morning were Dongyuan Li, 41, of Irvine, who was identified in court records as an executive at You Win USA Vacation Services in Irvine, as well as Michael Wei Yueh Liu, 53, of Rancho Cucamonga, and Jing Dong, 42, of Fontana, who authorities said owned and operated a company called USA Happy Baby in San Bernardino.
The three face charges of conspiracy, immigration fraud, money laundering, identity theft and other crimes, according to indictments filed in U.S. District Court.
Li’s husband, along with her business partner, Chao Chen, and several others involved in the schemes also face charges, but are believed to be living in China, court records show. Chen, Homeland Security officials told the Los Angeles Times, pleaded guilty to some crimes and agreed to cooperate with investigators as part of a plea deal, but then fled the country as he awaited sentencing.
Also indicted today was Wen Rui Deng, 65, an American citizen officials accuse of running a Los Angeles-based agency named Star Baby Care, which authorities believe to have been the largest birth tourism operation in the U.S. She, too, is in China, authorities said.
The indictments stem from a series of raids agents carried out in March 2015 on dozens of apartments used to house pregnant women and other locations linked to the birth tourism schemes.
Following the raids, several women and their husbands living in the apartments were ordered by a judge to remain in the country as material witnesses in the case. Many of them fled back to China, however, leading to charges being filed against them and an Irvine attorney who helped them escape.
The investigation into the operations named in today’s indictments began in 2013, when birth tourism operations were booming in Southern California and coming under increasing scrutiny by local officials and disgruntled residents. Officials were tipped off by anonymous letters sent to a federal immigration office and the Irvine Police Department that described a man operating a birth tourism business out of a luxury apartment building in Irvine.
The Carlyle Apartments happened to be across the street from a Homeland Security Investigations field office. From their windows, agents could see pregnant Asian women coming and going, HSI officials told the Times.
An undercover agent was dispatched to make contact with Chen, who was suspected of operating the business. The agent told him a cousin in China wanted to come to the U.S. to have a baby, officials said. Chen asked the agent for approximately $15,000 and instructed him to have his cousin call a number in China, according to the HSI officials.
A female HSI agent fluent in Mandarin called the number from a concealed number and, over several conversations, was coached on how to deceive U.S immigration officials. She was instructed to fabricate a job and the name of the place she went to school, information the agency employee later used to complete an application for a tourist visa to the United States on behalf of the woman.
“Everybody wants to come to the U.S.,” HSI agents recalled the employee saying on the phone. “It’s crazy how many people I have to train, I’m overwhelmed.”
It is not known how many women were brought to the U.S. by the three agencies implicated in today’s indictments. On her website for Star Baby Care, Deng boasted of having orchestrated 8,000 U.S. births since opening her doors in 1999, according to court records. Li and Chen told prospective clients they had successfully sneaked more than 500 pregnant women into the country, records show.
The investigation would later widen to include Star Baby Care and Happy Baby USA. The three companies followed a similar strategy, instructing clients on how to lie on tourist visa applications and putting them up in one of the dozens of apartments each operation leased across the region.
Although childbirth can be a legitimate reason to travel to the U.S. if the traveler provides the correct paperwork and evidence they can pay for their medical care, lying about the purpose of a visit can lead to charges of visa fraud. Customs and border protection agents at major ports of entry such as Los Angeles International Airport in recent years have tightened security for pregnant Chinese women and sometimes block them from entering the country.
Taiwanese, Korean, Turkish and Russian mothers are also known to engage in birth tourism, but the practice has become particularly popular with the newly wealthy Chinese middle class.
Investigators found women paying the birth tourism agencies were told to come to the U.S. before their third trimester and to wear loose-fitting clothes in order to better conceal their pregnancies from immigration officials. For example, in a voicemail message to a customer in 2014 intercepted by investigators, Li said: “The main thing is they look and see if you look obvious (pregnant); can they see it? First thing is not to let them see it. Second thing is don’t deny it if they can see it, and just say that you’re still here for vacation and just show them the return flight ticket,” according to Li’s indictment.
After giving birth, mothers typically stay in the U.S. at least long enough to observe the Chinese custom of “zuo yuezi,” a monthlong regimen that restricts a new mother’s diet and lifestyle in order to help her recover from pregnancy.
On a document titled “Strategies to Maximize the Chance of Entry” that investigators discovered while searching You Win USA’s offices, Li and Chen spelled out the particulars of their strategy. They told women, for example, they would improve their chances of slipping past immigration officials by putting on their tourist visa applications that they intended to stay at the Trump International Hotel in Honolulu.
Liu and Dong, who ran USA Happy baby, catered to wealthier clients that included Chinese government officials and charged as much as $100,000 for their services, authorities said.
The indictments also drew attention to the drain on resources at the hospitals where the women gave birth. After paying tens of thousands of dollars to the agencies that brought them to the U.S., the mothers often claimed to be uninsured or poor to receive a reduced bill for childbirth services, the indictments said.
In one 2014 case highlighted in Li’s indictment, a couple paid an unnamed hospital its indigent rate of $4,080 for bills that exceeded $28,000, despite having more than $225,000 in a U.S. bank account that was used to make purchases at a Rolex store in Costa Mesa and a Louis Vuitton shop in Beverly Hills.
In searches conducted during the 2015 raids, agents discovered stacks of unopened hospital laboratory bills, said Mark Zito, assistant special agent in charge for HSI in Los Angeles.
Despite the subterfuge the mothers employed to come to the country, their children nonetheless are citizens under U.S. law and officials said they do not plan to try to challenge their citizenship.
The nearly four-year lag between the raids and the arrests today was due in part, officials said, to the time it took investigators to comb through the large cache of records they seized, including a trove of communications from the Chinese messaging app WeChat, which had to be translated from Mandarin.
Following the raids, agents said, the shadowy operations went dark for several months.
“But, then, we weren’t quickly indicting people because we had to go through all this evidence and it started to come back,” said Zito. “The problem has definitely grown. … We might make an impact with these companies, but others took their place.”
It can be a lucrative business.
Li, for example, received $1.5 million in wire transfers from China in both 2013 and 2014, while other defendants took in similar amounts, according to the indictment.
In November 2013, Li was able to buy a house in Irvine for $2.1 million and a Mercedes-Benz for $118,000. She had enough cash on hand to buy both outright without loans, authorities alleged in the indictment. As part of the investigation into Li, authorities said they have seized the house, six vehicles, more than $1 million from bank accounts and many gold bars and coins.
After Li’s partner, Chen, and her husband fled, agents kept a close eye on her, anticipating that she too might try to return to China. But she has remained.
“I think she felt pretty emboldened by the fact that nothing has happened to her in four years,” Zito said. “This is going to be quite the shock.”