Chinese transplant surgeon arrested as alleged money launderer for Massachusetts steroid ring

A Chinese man who says he's a kidney-transplant surgeon was arrested at San Francisco's airport early this morning before he could board a plane back home now faces arraignment in Boston federal court on a money-laundering charge for his alleged efforts to hide the origins of at least $1 million in illicit steroid sales in Massachusetts over the past couple of years, according to court records unsealed today.

Zhendi Wang was formally charged with conspiracy to commit money laundering, which carries a maximum penalty of 20 years in prison.

Wang allegedly used checking and savings accounts he opened at a Boston branch of a national bank in 2019 to receive and ship out payments from conspirators who were importing the drugs into the US in general and Massachusetts in particular, according to an affidavit by a deputy Suffolk County sheriff who worked with the DEA on its investigation - and who writes that the investigation is continuing.

On June 5, 2019, ZHENDI opened his checking and savings accounts at a Boston, Massachusetts branch of Bank A. According to account opening information, for the checking and savings accounts at Bank A, ZHENDI indicated his occupation was a doctor at Wuhan Union Hospital. In support of his identity to open the accounts, ZHENDI provided his Chinese Passport with his photograph. Travel records for ZHENDI showed that he landed at Logan International Airport in Boston, Massachusetts from Beijing International Airport in Beijing, China on June 1, 2019. Four days later, on June 5, 2019, that is the same day that ZHENDI opened the checking and savings accounts at Bank A, he departed on a flight from Logan Airport to Beijing, China.

Union Hospital, a large teaching hospital, lists a Zhendi Wang as a kidney-transplant specialist; if it's the same person, about a month after he returned from Boston in 2019, he transplanted the kidneys of a baby who died after a premature birth into a 47-year-old woman suffering renal failure.

The affidavit first described the general financial nature of the ring before getting into the specifics of Wang's alleged role:

During the financial investigation, law enforcement identified a China-based company which utilized a website ("Steroid Website") to advertise and facilitate the sale of different types of anabolic steroid raw material, that is, "steroids raws." The product listing page for the Steroid Website includes numerous types of Schedule III controlled substances. Co- Conspirator #1 was directly linked to the website via his/her email address and Co-Conspirator #2 made payments from his/her personal PayPal account that referenced fee payments made on behalf of the business.

Co-Conspirators #1 and #2 each maintained personal financial accounts (PayPal and checking accounts) that they utilized to collect funds from various individuals throughout the United States. Since at least January 2021, Co-Conspirators #1 and #2 have collected an excess of $1 million from various individuals, including individuals currently being investigators by the DEA for trafficking in steroids in Massachusetts and others residing outside of Massachusetts known to law enforcement to have drug related criminal histories and to be tied to ongoing steroids trafficking investigations. Known individuals tied to the re-distribution of steroids in the United States have made multiple payments to the accounts held by Co-Conspirator's #1 and #2. Moreover, based on my training and experience, I believe that the nature of the payments made into the accounts maintained by the co-conspirators is indicative of recurring customer sales. For example, many individuals have made dozens, and in some instances hundreds of separate payments into co-conspirator accounts. In one specific instance, one of the customer's payments explicitly revealed that the payments were for steroids by referencing the brand name of the steroids being purchased.

And once they received the payments, the two transferred the money to Wang, the affidavit states:

[T]he majority of funds collected in the financial accounts of Co- Conspirators #1 and #2 were regularly transferred over to a checking account controlled by ZHENDI. These transfers, which were rapid and frequent in nature, on average conducted on a weekly basis, totaled more than $1 million since 2021. The use of Co-Conspirator accounts to collect customer payments and then subsequently transfer the funds to a separate account, in this case ZHENDI's checking account, is a common money laundering technique known as layering, which aids in the money laundering efforts to conceal the nature and source of the proceeds.

Once the funds were transferred into ZHENDI's checking account, ZHENDI further layered the funds by making transfers from his checking account into his savings account and/or ZHENDI's Investment Account, and sometimes back into his checking account from the ZHENDI Investment Account. ZHENDI's checking account at Bank A is the sole source of funding for money maintained in ZHENDI's savings account at Bank A and ZHENDI's Investment Account. A significant portion of the funds collected by Co-conspirators #1 and #2 and transferred to ZHENDI have been retained by ZHENDI in his own accounts, however, ZHENDI has transferred approximately $490,145 to third parties, including $430,145 to an individual in China and $60,000 to a business entity bearing a New York address. Each of these transfers exceeded $10,000.

Based upon my training and experience, I believe the checking accounts of Co- Conspirators #1 and #2 and even the checking account of ZHENDI served as pass through accounts which are designed specifically to conceal the source of the proceeds and the ownership of the money. I further believe that the money that entered ZHENDI's account served no legitimate business purpose because it was drug proceeds. I am also aware that ZHENDI transferred money to the ZHENDI Investment Account from his checking and/or savings accounts held at Bank A, and such transfers were in excess of $10,000, which is in violation of 18 U.S.C. § 1957.

The affidavit continues that on Friday, investigators learned that Wang was due to arrive in San Francisco on a flight from Shanghai on Sunday:

On July 30, 2023, ZHENDI arrived at San Francisco International Airport from China. He was on a one-way ticket. During inspection, investigators at the airport seized a laptop and a cell phone of ZHENDI's pending the issuance of federal search warrants. ZHENDI indicated to inspectors that he intended to remain in the United States, with the family with whom he traveled, for ten days. Instead, two days later and after investigators seized his electronic devices and United States bank accounts, ZHENDI booked a return flight to China from San Francisco with a scheduled departure of 12:55 a.m. Pacific Standard Time on August 2, 2023.

However, at 1:13 a.m. today Boston time - 10:13 p.m. Monday in San Francisco - Boston federal Magistrate Judge Jennifer Boal signed an arrest warrant for Wang. Agents then arrested him before his plane left San Francisco - without him.

Innocent, etc.