Feb. 1 (UPI) -- Three people were arrested this week for allegedly operating "birth tourism" businesses in Southern California that catered to Chinese mothers-to-be.
This is the first time criminal charges have been filed in connection with birth tourism, U.S. Attorney's Office spokesperson Thom Mrozek said in a media release.
The media release described birth tourism as schemes in which foreign nationals come to the United States to give birth so their children would receive American citizenship.
The three people arrested Thursday are charged with conspiracy to commit immigration fraud, international money laundering and identity theft. One of the accused is separately charged with having filed three false tax returns.
Following the arrests, the Department of Justice unsealed indictments that charge 19 people, including the three arrested, in connection to three birth tourism schemes in Southern California.
The 16 other defendants are considered fugitives and have left the country, according to the release.
"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," attorney Nick Hanna said in a media release. "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."
According to the indictments, all three defendants ran businesses that lured Chinese customers by touting the United States as has "the most attractive nationality" and "better air quality" as well as offering the potential to receive senior benefits while residing overseas among other incentives, the media release said.
Dongyuan Li, 41, ran You Win USA, advertising it had a 100-person team in the states and China. It allegedly served over 500 clients, according to the indictments. Li allegedly used 20 Irvine apartments, charging customers between $40,000 and $80,000.
Within two years, Li allegedly received $3 million in wire transfers, according to the release.
Michael Wei Yueh Liu, 53, and Jing Dong, 42, are accused of running USA Happy Baby Inc. in San Bernardino County, charging VIP customers up to $100,000.
The two allegedly served Chinese officials, the media release said, adding the two defendants received 3.4 million in terminational wire transfers from China between 2013 and 2014.
The indictments alleged they all operated "maternity houses."
They would coach their Chinese customers to lie during the U.S. Consulate interview in China saying they were only planning to be in the states of two weeks and to wear loose clothing to hide their pregnancies from U.S. Customs at ports of entry. They would also encourage them to enter through Hawaii and then travel to California because Hawaii customs is easier to get through, the Department of Justice said.
The indictments allege that customers who had hospital births also failed to pay all of their medical bills before returning to China.
The indictments charge them with having operated the three schemes before they were dismantled in March 2015, when federal agents 35 search warrants.
"The indictments announced today confirm IRS Criminal Investigation's commitment to following the money - from China to the United States - to help identify the promoters of this alleged illegal international birth tourism scheme. Using cash, fabricated financial documents, and nominee names for the transfer of money from China to the U.S., the promoters attempted to further their lucrative birth tourism enterprise," said IRS Criminal Investigation Acting Special Agent in Charge Bryant Jackson in a media release.