Feds: Barbershop owner led California-based laundering cell in $40 million elder fraud scheme

A Miramar barbershop owner and several of his employees, along with roughly two dozen other San Diegans, allegedly played key roles in a massive international elder fraud scheme suspected of bilking more than 500 victims out of over $40 million, according to an indictment unsealed Wednesday and related court documents in San Diego federal court.

While prosecutors contend that the masterminds of the fraud scheme worked from India, Thailand and the United Arab Emirates, the San Diego barbershop owner and his alleged crew are suspected of moving tens of millions of dollars from the fraud victims to the international perpetrators through fake San Diego businesses in exchange for a cut of the profits, according to court records.

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The FBI’s San Diego field office announced that many of the defendants were arrested Wednesday in a series of raids around the county, including at Mecca Barbershop in Miramar.

A handful of the alleged money launderers from San Diego are also charged with directly taking part in the fraud itself, with prosecutors arguing that their accents gave them a leg up in successfully manipulating their targets.

“The recruiting of these money transmitters is believed to have been advantageous to the India-based (criminal organization) because native American English speakers had a higher conversion rate in defrauding elderly Americans,” Assistant U.S. Attorney Ashley Goff wrote in a court document unsealed Wednesday.

While prosecutors and FBI investigators said they identified more than 500 victims and more than $40 million in fraud, they believe “those numbers only represent a small fraction of the total number of victims and losses, given the known scope of the organization, the time period it has operated, and the fact that elder fraud is unfortunately under-reported by victims,” Goff wrote.

“As today’s numerous arrests confirm, FBI San Diego’s Elder Justice Task Force and its partner agencies are leading the charge against fraudsters targeting American seniors,” Mark Dargis, special agent in charge of the FBI San Diego field office, said in a statement. “Our nation’s elderly citizens deserve to be treated with respect, not scammed out of their hard-earned savings by criminals exploiting their trust.”

Victor Lee Marion Jr., the 41-year-old owner of Mecca Barbershop on Black Mountain Road near Miramar Road, is the lead defendant in the 22-person indictment and is suspected of recruiting many of the San Diego residents, including other barbers at his shop, who allegedly helped launder money for the fraud scheme.

Details of the scheme, which allegedly began as early as July 2021, are contained in a government motion arguing that Marion is a flight risk and a danger to the community and should remain in custody without bond. It was not immediately clear if Marion had an attorney who could comment on his behalf.

According to that detention motion and the indictment, the scheme involved three phases. First, overseas fraudsters would allegedly target Americans over the age of 55 with pop-up advertisements on their computers, offering fake tech support in exchange for payment.

Second, some of those same victims would allegedly be contacted later and convinced that they’d mistakenly been given a refund and needed to pay the money back. At that point, the alleged fraudsters would seek to obtain remote access to the victims’ computers so they could manipulate the victims in various ways into believing the refund myth and convince them to turn over large sums of money.

The third and final phase involved the transmission of money from the victims to the fraudsters and is allegedly where Marion and his San Diego cell entered the picture. They allegedly registered shell companies in San Diego and opened bank accounts in the names of those businesses where they could accept the victims’ payments. The San Diego crew allegedly kept a small percentage of the funds and sent the rest to the scheme’s masterminds in India and elsewhere.

In one incident highlighted by prosecutors, a 76-year-old San Diego man was allegedly convinced that he needed to repay AT&T nearly $100,000 in over-refunded money. After the victim unsuccessfully attempted to wire the money remotely, a member of Marion’s crew allegedly showed up at his home and drove him to two San Diego bank branches to make the transfer in person.

At the first bank branch, a manager pulled the victim aside and warned him not to make the transaction. But at the second branch, the transactions were allowed to go through, with the victim transferring nearly $200,000 to the fraudster accompanying him, according to prosecutors. That alleged fraudster was charged in September in a separate case and also named in the indictment unsealed Wednesday.

According to prosecutors, Marion and several other members of the San Diego money laundering cell traveled to Thailand last year to learn how to manipulate victims during the second phase of the scam. Prosecutors alleged that one of the men who went on that trip to Thailand fled the U.S. earlier this year when two of his close associates were arrested and charged with federal crimes related to the scheme.

At least two alleged members of the San Diego money laundering crew have pleaded guilty in related cases. One admitted in a July plea agreement that he facilitated nearly a half-million dollars of fraudulent payments from victims to overseas conspirators. Another admitted in a plea agreement last week that he laundered between $3.5 million and $9.5 million for the crime group.