Law enforcement sources told the San Jose Mercury News that Yee, a Democrat, was named in a federal indictment. Another target was Raymond "Shrimp Boy" Chow, an alleged leader in San Francisco of Wo Hop Ton, a Hong Kong crime syndicate.
The FBI conducted a series of raids early Wednesday morning in the Bay Area and at Yee's office in Sacramento. A federal court hearing was scheduled for Wednesday afternoon for those arrested.
Yee, born in China and brought to the United States at the age of 3, served on the San Francisco school board and board of supervisors before being elected to the state Assembly in 2002. Four years later, he became the first Chinese-American elected to the state Senate.
He is a candidate for secretary of state.
Yee is the third Democrat this year to be mired in corruption charges. One Los Angeles-area lawmaker, State Sen. Ron Calderon of Montebello was indicted in February, and another, Assemblyman Roderick Wright of Inglewood was convicted of voter fraud in January.
Chow was sentenced to 24 years for racketeering in 1995. The sentence was cut to 11 years after he cooperated in the investigation of another Chinatown gangster.
[San Jose Mercury News]
Notable deaths of 2014 [PHOTOS]