Bay Area con artists bribed island nation in bizarre corruption scheme

When a Chinese couple pleaded guilty to federal bribery charges, it brought to a close a bizarre story that involved a United States nonprofit, high-level corruption and international intrigue.

According to the Department of Justice, Cary Yan and Gina Zhou paid tens of thousands of dollars in bribes to elected officials in the Marshall Islands, a tiny nation in the Pacific Ocean, as part of a plot to turn one of its islands into a “special economic zone.”

That economic zone would be located on Rongelap Atoll, near the site the U.S. government used for nuclear weapons testing after World War II, and would have turned the island into something akin to a futuristic tax haven. The plan might have gone forward had Yan and Zhou not been arrested in Thailand on the U.S. charges in 2020.

Now, a new investigation by the Organized Crime and Corruption Reporting Project (OCCRP) has revealed that the plot was part of what it terms a “global grifting odyssey” that involved over a million dollars in clandestine payments to diplomats and fixers at the United Nations.

And it began in the San Francisco Bay Area with a bizarre business selling Chinese “miracle water” that the proprietors unlawfully tried to associate with NASA.

Yan and Zhou did not respond to OCCRP’s requests for comment.

Their scheme raised concerns about Chinese influence in the Marshall Islands and corruption in the United Nations. But it also emphasizes that fraud in places further from the centers of power—for example, the Bay Area—often doesn’t stop there.

According to the OCCRP investigation, Yan was born in China. Before moving to the U.S., he got his start in business selling water from his family’s potassium salt mine as a miracle cure. The bottles of water retailed for $150 each.

A Chinese court later concluded that the business was actually a multilevel marketing scheme that defrauded 20,000 people out of $18 million. In 2020, Yan’s brother was sentenced to seven years behind bars for his role in the scheme.

But Yan evaded the long arm of the law in China. Years earlier, he had relocated to Silicon Valley and started marketing the “miracle water” internationally.

In the Bay Area, he met and entered into a romance with Zhou, who was over a decade his junior. In 2014, they opened the Immortal Float Center in Santa Clara, a spa that used the “miracle water” in sensory deprivation tanks it called the Immortal Digital Life Cube.

The spa racked up positive reviews on Google Maps and Yelp.

But then Yan tried to take the business a step further. He asked another Bay Area entrepreneur in the alternative medicine field to use a “quantum resonance spectrometer” to test the “frequencies” in the water and issue a report attesting to its miraculous properties.

The upshot? That entrepreneur’s company rented space at the NASA Ames Research Center in Mountain View. 

Yan now marketed and labeled the water as if it were manufactured at the NASA facility and endorsed by the space agency.

NASA officials told OCCRP that it had no connection to Yan’s business and that his actions constituted an unauthorized use of its name and logo.

Larisa Troche, who visited the Immortal Float three years ago, told The Standard that she enjoyed herself and didn’t notice anything awry about the spa. She had never heard of the “miracle water.” There was only one thing that struck her as odd.

“It seemed very inactive, like there was nobody there,” she said.

Asked for her reaction to the owners later being convicted of fraud, Troche was unfazed. “I’m old enough not to be too shocked anymore,” she said.

Yan and Zhou’s next move was far more audacious than miracle water: They moved on to infiltrating the United Nations.

Working through a network of contacts—including a New York-based businessman currently under indictment for allegedly harassing dissidents on behalf of China’s Ministry of State Security—they eventually got a photograph with then-Secretary General Ban Ki-moon.

They did that by paying at least $150,000 to Ugandan diplomats, a U.N. spokesperson told OCCRP.

The couple then took over World of Hope International, a New York-registered charity that funded educational programs in West Africa and was accredited by the U.N.’s Economic and Social Council. They renamed it the World Organization of Governance and Competitiveness. The duo paid a diplomat from the Dominican Republic $1 million to help them take the organization’s helm.

Yan and Zhou now had a formal association with the U.N. That meant they could organize high-profile U.N. events, rack up photo opportunities, solicit payments from Chinese business people for photos at the intergovernmental organization and promote cryptocurrency schemes. 

The Chinese government later concluded those crypto schemes defrauded $130 million from investors, OCCRP reported.

Soon, Yan and Zhou would move on to the Marshall Islands, where their U.N. association would make their plan for a special economic zone appear more credible.

In 1954, the U.S. had detonated a hydrogen bomb on Bikini Atoll. That explosion, roughly 1,000 times more powerful than the atomic bomb the country dropped on Hiroshima, spilled radioactive ash onto neighboring Rongelap Atoll. Yan and Zhou pitched the proposal as a way to clean up the island and let displaced residents return nearly 70 years later.

Kenneth Kedi, the speaker of the Marshall Islands’ parliament, told OCCRP that he supported the proposal because he believed it had U.N. backing. But he later had misgivings after seeing signs the couple was pushing a pro-China geopolitical agenda.

“That was a big red flag for me,” Kedi told OCCRP.

After their arrest in Thailand in 2020, Yan and Zhou were extradited to the U.S. to stand trial. They eventually pleaded guilty to one count each of violating the Foreign Corrupt Practices Act.

In May, a judge in New York sentenced Yan to 42 months in prison. He is due for release next month. Zhou was sentenced to time served and deported to the Marshall Islands—she and Yan had acquired Marshallese citizenship, and the Marshall Islands government isn’t sure how.

Meanwhile, the Immortal Float Center is now defunct. Its old location in Santa Clara is now occupied by a fitness center.