Feds say illegal pot operation funded with Chinese money Federal prosecutors say three men have been arrested on charges they took part in a scheme to illegally grow marijuana in Southern California homes purchased with money from China

LOS ANGELES -- Three men were arrested Thursday as part of an illegal marijuana-growing operation in Southern California that was funded with money from China, federal prosecutors said.

Authorities seized nearly 200 pounds (90 kilograms) of processed marijuana and about 3,000 plants during raids on seven large homes in neatly kept San Bernardino County neighborhoods, said Ciaran McEvoy, a spokesman for the U.S. attorney in Los Angeles.

The alleged coordinator of the scheme was a real estate agent who spent more than $5 million to buy the homes with money wired from the Guangdong Province of China, authorities said. Three guns and more than $80,000 in cash was seized from his home.

The case is the latest where overseas money backed black market marijuana growing operations in places where the drug is legal for adults, prosecutors said.

"In states that have decriminalized marijuana, we have seen an influx of foreign money used to establish grow operations, with much of the marijuana being destined for out-of-state consumers," U.S. Attorney Nick Hanna said.

In April, federal and local law enforcement agents seized about 100 houses in Northern California that were purchased with money wired to the U.S. by a Chinese-based crime organization and used to grow massive amounts of pot. Colorado authorities have said Cuban syndicates are behind some of the growing operations in that state.

The Southern California operation was being run by Lin Li, also known as Aaron Li, 37, who purchased the homes, ran the shell companies that managed finances and paid utility bills, prosecutors said.

Ben Chen, 42, and Jimmy Yu, 44, were allegedly cultivating the crop.

The three face charges of growing and distributing marijuana. They made initial appearances in U.S. District Court in Los Angeles, but did not enter pleas.

Attorney Anthony Solis, who represents Yu, said he had barely read the complaint and didn't have a comment. Attorneys for the other two defendants did not immediately return emails seeking comment.

Messages seeking comment left on Li's cellphone and an email address listed in court documents were not immediately returned.

Prosecutors said the pot was being sold in California and Nevada.

Marijuana is legally grown and sold in California for recreational and medical use, though it is strictly regulated. While it remains illegal under federal law, U.S. authorities have typically only prosecuted the most egregious cases.

In an affidavit supporting the arrests, Agent John Harris of Homeland Security Investigations, said Li pirated the enormous amount of electricity needed to grow marijuana under bright lights by tapping into power lines before they passed through a meter measuring use.

The investigation that lasted more than a year included tips from neighbors.

"No one is ever seen coming or going," one neighbor complained, according to the affidavit. "The smell of marijuana is overwhelming."