Feds: California man ran kidnapping scam from Mexican prison

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LOS ANGELES (AP) — A California man imprisoned in Mexico ran a “virtual kidnapping” scheme that duped dozens of Americans into paying ransoms to free family members who were never actually kidnapped, according to federal prosecutors.

Julio Manuel Reyes Zuniga, 48, appeared in a Los Angeles court on Thursday after being extradited this week from Mexico. He pleaded not guilty to 31 counts, including extortion, conspiracy to commit extortion, foreign communication of threats and conspiracy to launder money, the U.S. Attorney's Office said.

Reyes Zuniga, a reputed member of the Rancho San Pedro street gang, ran the scheme from 2015 to 2018 while he was locked up for murder at the Santa Martha Acatitla Prison near Mexico City, prosecutors said. He finished his sentence earlier this year and was held for extradition in the extortion case.

Reyes Zuniga and co-conspirators used smuggled cellphones to call their victims and claim they had kidnapped a loved one and planned to harm the person unless a ransom was paid, according to the indictment. In reality, no kidnappings had taken place.

Reyes Zuniga and others would demand the ransom payments in the form of wire transfers, cash dropped at locations, or purchase of electronics such as iPads or iPhones, according to court papers.

Once the money was delivered, individuals in Mexico delivered the proceeds to the imprisoned Reyes Zuniga in person, court papers said.

At least 30 victims in Southern California each paid thousands of dollars on average, prosecutors said.

If convicted of all charges, Reyes Zuniga could face 20 years in federal prison for each count in the indictment.