How the U.S. Treasury Department Helps Chinese Organized Crime Transform American Homes Into Drug Dens

From Oklahoma to Maine, a little known program operated by the U.S. Department of Treasury has been leveraged by foreign criminal organizations to acquire properties throughout rural America and transform them into drug manufacturing and trafficking hubs.

The so-called Community Development Financial Institutions (CDFI) program, originally created by Congress in 1994, may have started as a way to help low-income immigrants access financing to purchase homes.

However, since 2019, thanks in part to COVID-19 Era funding enhancements, the program has become a way for foreign criminal organizations to obtain taxpayer-funded benefits as they scoop up American land and American houses for elaborate international drug operations.

[RELATED: Triad Weed: How Chinese Marijuana Grows Took Over Rural Maine…]

According to a leaked Department of Homeland Security memo, there are more than 800 Chinese-owned properties throughout the U.S. where Asian Transnational Criminal Organizations (ATCOs) are engaged in illegal drug manufacturing and trafficking.

DHS believes the proceeds of the marijuana trafficking are used to finance other illicit activities, including human trafficking, narcotics trafficking, and other activities in the People’s Republic of China.

At the center of many of these operations is real estate financing provided by Quontic Bank, a New York-based CDFI. Quontic has originated mortgages for more than 70 properties in rural Maine and dozens in Oklahoma, according to a review of property records by the Maine Wire.

Of those properties, several in Maine are known to law enforcement as suspected illegal marijuana growing facilities, law enforcement sources have confirmed.

According to the Maine Wire’s investigation, including a review of electrical, tax, and real estate records, interviews with neighbors and law enforcement, physical inspections of the properties, and interviews with building contractors familiar with the locations, many of the sites that were purchased using Quontic Bank CDFI loans are active or recently active cannabis cultivation sites.

For example, at a rural property at 169 Baker Road in Winterport, a former family home sits destroyed as the result of an electrical fire caused by an illegal marijuana grow that was consuming too much electricity. That property was purchased by Wanzhen Huang using a Quontic Bank loan in August 2021. Following the fire, the house was abandoned, and as the result of sitting exposed through recent winters, the building has been totally destroyed.

On the Norridgewock Road in Fairfield, a home purchased in July 2021 by Juan Lin using a Quontic Bank loan was transformed into an illicit marijuana growing operation, according to images obtained of the inside of the building and multiple visits by the Maine Wire.

In Mexico, just 150 feet from a daycare facility, a property owned by Kun Yu Chen operates as an illegal marijuana growing site, according to multiple neighbors and an inspection of the property by the Maine Wire.

According to area residents who have observed the property since 2022, a U-Haul truck with Mass. plates arrives at the property roughly every two months, backs up to the front door, and then departs after a short while — always with the same two men appearing to load cargo into the truck.

The property was purchased using Quontic Bank financing in June 2022. Under Maine law, marijuana businesses are not allowed to operate so close to childcare facilities or schools.

Another Quontic-financed property is on Estes Ave in Palmyra. Although the town has approved no marijuana production facilities, state electrical inspection records indicate that the property is a cannabis cultivation site with commercial-grade electrical service.

Multiple marijuana industry veterans, including a licensed medicinal grower who is also an electrical engineer, have told the Maine Wire that commercial-grade electricity would only be necessary for indoor grows that drastically exceed the plant-number limits placed on legal medicinal growers.

In other words, only someone growing far more than 500 square feet of canopy would go through the expense and hassle of installing a 400-amp or 800-amp electrical entrance.

That Palmyra location was purchased by Wen Xia Li in Nov. 2021, according to Somerset Registry of Deeds records.

In Norridgewock, neighbors have long suspected that a property on Sandy River road is growing marijuana illegally. The property, owned by 739 Sandy River LLC, smells strongly of cannabis and the garage appears to have been converted into a grow room, with the characteristic electrical upgrades and blacked-out windows.

The LLC was registered to Qiongyan Wu, of Flushing, N.Y., in Dec. 2020. According to mortgage records, Wu purchased the property using a Quontic mortgage before transferring it into the LLC.

These are just a handful of the Chinese-owned, Quontic-financed properties in Maine that neighbors and law enforcement suspect are operating as unlicensed cannabis grows.

According to federal spending records, Quontic has received, either directly or through Quontic Bank Holdings Corp., more than $3 million in federal grants since Sept. 2020. That grant money was part of a $20 million tranche of “rapid response” CDFI funding passed in response to the COVID-19 pandemic.

During the same time period, federal records show Quontic received taxpayer-funding to subsidize 373 loans for properties throughout the U.S., though the records don’t indicate where those properties are located.

Quontic has also financed, according to real estate records, similar properties for out-of-state Chinese men and women, primarily from New York and Massachusetts, in Lee, Detroit, Mercer, Livermore, Windsor, Sebec, Newburgh, Fayette, Oxford, Greenbush, Hartland, Freedom, Guilford, Etna, Fairfield, Eddington, Corinna, Dixmont, Augusta, Belgrade, Pittsfield, Athens, Howland, Prospect, Ripley, Rome, Searsmont, Corinth, Skowhegan, Milo, Troy, Vassalboro, Stetson, Rumford, and Dover-Foxcroft.

Another property stands out: 39 Freedom Way Lane, Starks. The residence is described in electrical records as a cannabis cultivation site. The property was purchased by Yongwen Chen using a Quontic Bank mortgage in Aug. 2021. Shortly after, the house had commercial-grade electricity installed.

On a recent visit, the Maine Wire observed the delivery of hundreds of marijuana growing lights — nearly 600 pounds — that, a source said, had been shipped to the property by a recently formed LLC based in Oklahoma City, OK.

The connection to Oklahoma — one of many the Maine Wire has uncovered while investigating illegal Chinese-owned marijuana grows in the Pine Tree State — is significant considering that Oklahoma law enforcement are dealing with similar illicit drug operations occurring on a much larger scale.

[RELATED: Chinese Nationals Convicted of Drug Conspiracy for Illegally Trafficking Black-Market Marijuana from Oklahoma Grow Operation…]

Since 2020, Oklahoma has shuttered nearly 1,000 illegal marijuana cultivation operations. According to Mark Woodward, a spokesman for the Oklahoma Bureau of Narcotics, 80 percent to 90 percent of them are linked to Chinese organized crime rings.

Just last month, two Chinese nationals were convicted for their roles in an elaborate illegal drug trafficking conspiracy involving blackmarket marijuana grown in Oklahoma.

According to an investigation by Steven Crowder and his Mug Club journalists published Thursday, Quontic Bank has also been involved in securing funding for residents of Oklahoma linked to illegal marijuana trafficking.

As previously reported by the Maine Wire last year, almost all of the Quontic mortgages used to purchase Maine properties were originated post-2020 by two loan officers, Steven Ho and Ying-Chan Weng.

Ho and Weng, Crowder’s team uncovered, have also been involved in securing home financing for individuals Oklahoma with ties to illicit marijuana businesses.

Woodward, from Oklahoma’s Bureau of Narcotics, told Crowder’s team that the agency is actively investigating Quontic’s role in providing home loans for individuals linked to the state’s foreign organized crime networks.

“Quontic Bank and Ying-chan Weng we are taking a look at,” Woodward wrote in an email to Crowder’s team.

“Can’t elaborate further due to the on-going nature of our investigations,” he wrote.

While Quontic, Ho, and Weng have not been accused of any wrongdoing, it’s clear that all three profited handsomely from the surge in demand for CDFI loans that began in 2020, including demand from illicit marijuana growers who acquired property throughout rural Maine.

In an interview with the Maine Wire, Ho said he was not aware that mortgage applicants were using or intended to use properties financed under Quontic’s CDFI program for marijuana cultivation and trafficking.

Ho, a Taiwanese foreign national, said he targeted the Chinese immigrant community because he speaks Chinese and the CDFI program was geared toward their needs.

Under the terms of the program, loan recipients do not need to be U.S. citizens, do not need to prove regular income, and can source any upfront expenses or closing costs from third parties, with limited oversight. All of these factors, which seem particularly well suited to a foreign criminal organization that wants to acquire land in America, are advertised openly on Quontic’s website.

Ho said Quontic’s business grew at an unprecedented rate around the same time he started deliberately focusing on originating CDFI loans for Chinese immigrants.

“I remember, in one of the meetings, the company grew 1000 percent, which was incredible,” said Ho. “It was, like, you know, some crazy number.”

“Some strategic thing was happening where everyone was getting the… the right people were being hired… there was just some kind of momentum that was happening in 2020,” Ho said.

Ho left Quontic in Aug. 2022 shortly after the untimely death of founder and CEO Steve Schnall, who reportedly died in a biking accident at age 55.

Weng, a Chinese-foreign national who attended Zhejiang University, told the Maine Wire last year that she was unaware of activities occurring at the properties for which she arranged financing.

“Not that many banks have this type of program in that state, so they know we’re the only one that does this type of loan,” Weng said.

“I have to tell my bank,” said Weng. “We have to stop doing it.”

Quontic’s PR department has not responded to requests for an interview from the Maine Wire.

Watch Crowder’s hour-long investigation — with a cameo from the Maine Wire — here: