US Immigration and Customs Enforcement (ICE) Director Todd Lyons revealed on Thursday that transnational gangs within the Chinese Communist Party (CCP) have been defrauding the United States via a massive gift card scheme aimed at enriching the Chinese military. The matter was revealed following a Homeland Security Investigation (HSI).

Testifying before Congress, Lyons explained that the US is funding its own adversaries through gift card fraud committed by Chinese illegal aliens who unlawfully entered the United States under the Biden administration. He told lawmakers that the CCP has deployed its transnational criminal organizations to “wreak havoc” on the US.

“HSI actually broke the largest gift card fraud case ever, and it was from transnational gangs within the CCP that were sending that money back to military units in China. And that all came from gift card fraud here in the United States,” the ICE director said.

Lyons contended that “it was military-aged Chinese males who entered under the last administration…that were able to [send the gift cards] back to the People’s Republic of China.”

HSI’s operation “Project Red Hook” revealed how Chinese organized crime groups exploit gift cards to launder money. According to HSI, “organized criminal elements in China acquire gift cards through multiple fraudulent means. For example, gift cards are obtained by hacking US companies and targeting US citizens through romance and elder fraud schemes. The criminal elements then send the gift card data to multiple cells of Chinese nationals operating in the United States through a Chinese-based messaging platform.”

“Once US-based cells receive the gift card data, they then spend the gift cards to purchase high-value electronic, principally Apple products. After purchasing the Apple products, cell members consolidate the electronics in warehouses for shipment to China, Hong Kong, or countries in Southeast Asia. The cells primarily operate in states with no sales tax to maximize their profits,” ICE said in a release.

Several Chinese nationals have been convicted for their roles in the gift card scheme.