23 Arrested After 2-Year Counterfeiting Inquiry

Capping a two-year investigation, FBI agents arrested 23 people Tuesday in connection with counterfeiting operations based in Little Saigon that bilked major financial institutions, including the U.S. Treasury, of millions of dollars.

The individuals are accused of manufacturing credit cards and traveler’s checks similar to those found in the trunk of a car driven by a 25-year-old man charged with killing a California Highway Patrol officer in July, authorities said. FBI agents are investigating whether the suspect, Hung Thanh Mai, who is jailed in Orange County, is linked to the scam but so far have not made a connection.

U.S. Atty. Nora Manella in Los Angeles said the counterfeiting operations were run by “sophisticated groups of criminals trafficking nationwide in a wide array of contraband.” Tuesday’s arrests “severely disrupted the ability of these groups to inflict massive losses on financial institutions,” Manella said. California banks alone have reported recent losses of about $500,000 a month because of such scams, the U.S. attorney’s office said.

Most of those arrested Tuesday are from Garden Grove and Westminster. They are accused of selling bogus credits cards and checks in Virginia, Florida, Colorado and Texas.

In some cases, “middlemen” then used the fraudulent goods to obtain unspecified amounts of cash, Assistant U.S. Atty. Michael C. Zweiback said.

Authorities purchased about $5 million in counterfeit securities and $1.5 million in Visa and American Express traveler’s checks during the undercover investigation, dubbed Operation “Paper Caper.” Often, individuals conspired to sell drugs, weapons, checks and pirated computer software.

The FBI first became aware of the counterfeiting operations about two years ago, after people arrested around the country began telling investigators that “their source was in Southern California, and specifically Orange County,” said Assistant U.S. Atty. Marc Greenberg.

Federal agents working in the Little Saigon area bought such items as fake payroll checks, counterfeit credit cards, silencers and parts used to convert semi-automatic weapons into fully automatic weapons, Greenberg said.

Stolen Internal Revenue Service and state of California checks also were sold to undercover investigators, authorities said.

Some of the forged traveler’s checks were made by the same manufacturer that printed the bogus checks found by CHP Officer Don Burt in the trunk of a car moments before he was shot July 13 during a traffic stop, authorities said. The Tijuana manufacturer has since been shut by authorities.

Police later arrested Mai, who had fled to Houston.

“I don’t think we ever expected them to be as full-service as they actually were,” Greenberg said. “They had copies of Windows 95 a week before the software program was available on the market.”

Arrest warrants were served Tuesday by 170 law enforcement officers from the FBI, several Orange County and San Gabriel Valley police departments and the California Bureau of Narcotic Enforcement.

A list of those arrested was not readily available, but authorities said they included Raymond Pang, a fugitive who was arrested on suspicion of manufacturing and selling silencers, and David Nguyen, held on suspicion of delivering $200,000 in counterfeit payroll checks. It was not immediately known where they were arrested.

Others were being held on suspicion of sale of counterfeit traveler’s checks, conspiracy to manufacture counterfeit checks and theft of credit cards through the mail, FBI officials said.

About half of those arrested were being held at the Metropolitan Detention Center in Los Angeles, and the others were expected to be transferred from various cities to the jail, authorities said.

Investigators said they are searching for 10 other suspects.