Federal agents took into custody two Chinese nationals in Hollywood on Wednesday, accusing them of being part of an international refund fraud operation that has cost Target millions of dollars recently.
Homeland Security Investigations agents said Migui Li, 28, of Levittown, New York, and Ziyu Zhao, 20, of Flushing, New York, were members of a “transnational criminal organization” and were personally responsible for approximately $94,000 in Target store losses in the Southeast, including stores in Miami-Dade and Broward counties.
A federal criminal complaint alleges that Target has lost $4.6 million as a result of the “post-purchase markdown” scam since 2022.
Agents stated that members of the group “used a social engineering tactic” in which they would purchase high-value electronics at actual retail price and then manipulate the HTML code on Target’s website “to make the same item they purchased appear to be for sale at a significant discount” on their devices.
According to authorities, they would then request a price match from customer service and receive gift vouchers for the difference. They would then repeat the process, purchasing new products with the fraudulently obtained gift cards.
The ill-gotten electronics would then be transported to China.
Federal authorities identified Li and Zhao as members of the organization and reported that they were back in South Florida on Tuesday and Wednesday, conducting more than $3,000 in fraudulent transactions.
Authorities said they watched the couple at a hotel in Dania Beach as Li loaded two packages into their rental car. The two then drove to a FedEx location in Hollywood, according to the complaint.
After the two arrived, agents reported seeing Li take out the two items and then “Target shopping bags with additional merchandise” in the car.
Authorities said Li left the packages with FedEx for overseas shipment to Hong Kong.
Authorities stated that they approached Li and Zhao before they could leave the establishment. Both of them, they said, “consented to a search of the parcels, which contained packaged electronics, including Polaroid cameras, film, Nintendo Switches, and other items.”
According to the lawsuit, both admitted they were paid to purchase gadgets in the United States and ship them to China via Hong Kong.
Li stated that he used WeChat, “where he received the gift card serial numbers he utilized.”
“When asked about changing the advertised price of certain items, he either claimed he didn’t understand the question or refused to answer,” the complaint says.
The complaint alleges that Zhao was “more forthcoming,” admitting to changing advertised prices.
Agents were both arrested on allegations of conspiracy to commit mail and wire fraud.
As of Friday morning, both were being held by the Broward Sheriff’s Office on behalf of the United States Marshals Service at the former agency’s Paul Rein Detention Facility in Pompano Beach.
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