Wire fraud, extortion indictment highlights dangers of elder fraud

SAVANNAH, GA:  A Chinese national has been indicted for his role in a multi-state scheme that swindled more than $1 million by targeting senior citizens.

Xiao Kun Cheung, 58, is charged with Conspiracy to Commit Wire Fraud, Wire Fraud, Receiving the Proceeds of Extortion, and Possession of Controlled Substances, said Jill E. Steinberg, U.S. Attorney for the Southern District of Georgia. The charges carry a statutory penalty upon conviction of up to 20 years in prison and substantial financial penalties, followed by a period of supervised release upon completion of any prison term. There is no parole in the federal system.

“This indictment uncovers a financially devastating scheme that targeted seniors up to 92 years old. It represents just a fraction of the multitude of victims of elder fraud each year in the United States,” said U.S. Attorney Steinberg. “With our law enforcement partners, we are committed to protecting vulnerable citizens from the predation of scam artists.”

Originally indicted in September, the superseding federal indictment returned in December by the Southern District Grand Jury alleges that Cheung was part of a conspiracy that targeted elderly victims in multiple cities including Savannah and Pooler, Georgia; Naples, Florida; and Cleveland, Tennessee. The conspirators initially contacted seniors through phone calls or pop-up messages on their computers, falsely claiming that the victim’s computer or financial accounts had been compromised.

The conspirators, claiming to provide assistance to the seniors, then persuaded the elderly victims to withdraw large sums of money, purchase gift cards, or buy gold bars to deliver to a conspirator for safekeeping by a government agency. Cheung was arrested in March while attempting to pick up approximately $132,000 in gold bars from a victim in Pooler.

As discussed in court documents and testimony, Cheung is a previously deported Chinese national illegally present in the United States. He currently is being held in federal custody awaiting further court proceedings.

Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.

According to the FBI Internet Crime Complaint Center (IC3), in 2023, victims older than age 60 represented the largest single age group targeted by fraud, losing more than $3.5 billion – an almost 11 percent increase from 2022, with more than $92 million in losses to senior victims in Georgia alone. The average dollar loss of each elderly victim was nearly $34,000. Significantly, law enforcement officials believe the amount of fraud is significantly higher than reported because many victims are embarrassed or afraid to report the crime.

Scams commonly targeting older adults include:

• Government imposter fraud, in which individuals falsely claim to represent a government agency such as Social Security, the Internal Revenue Service, Medicaid, or local, state, or federal law enforcement, contact a person to “warn” them of alleged suspicious activity and take possession of money or other items of value from the victim for “safekeeping”;
• Tech support scams, with telemarketers claiming to help “hacking” victims, or notifying the victim of false lottery winnings or other prizes; and,
• Romance scams, in which scammers use dating sites, social networks, or chat rooms to contact older adults and build online relationships so the scammer can persuade the victim to send them money.

To avoid falling victim to these and other scams, the Department of Justice Elder Justice Initiative advises potential victims and their caregivers to:

• Accept computer or other technical support only from known, trusted individuals or from a person you’ve hired for that purpose;
• Scammers falsely claim you must act immediately; before taking any action to purportedly help a grandchild or other relative or friend, check with that person or that person’s relation by phone to validate the request;
• If a caller claims to be from an established organization such as a charity or law enforcement, look up the number of the organization independently and call them to verify the request;
• Consider it a red flag if the caller insists on secrecy. Never allow anyone to discourage you from seeking information, verification, and counsel from family or friends before making any financial transaction;
• The federal government will never call you on the phone to ask for personal information or to threaten you;
• Do not send money, gift cards, or wire transfers to anyone you’ve met only online; and,
• Do not click on links sent to you in unsolicited emails or text messages.

Those who believe they have been, or who may know, victims of elder fraud are asked to call 911 in an emergency, or contact the Internet Crime Complaint Center’s Elder Fraud Hotline at 833-FRAUD-11 (833-372-8311). Educational resources on elder fraud and abuse are available online at https://www.justice.gov/elderjustice.

This case is being investigated by the FBI with assistance from the Pooler Police Department, and prosecuted for the United States by Southern District of Georgia Assistant U.S. Attorneys Darron J. Hubbard and Matthew A. Josephson.