California ‘House of Horrors’ Suspect Tied to Illicit Casino and Drug Bust

A California property investor accused of abusing more than a dozen surrogacy-born children at his mansion is also facing scrutiny over an illegal casino and drug operation uncovered at a commercial building he owned.

Guojun Xuan, 66, and his wife Silvia Zhang, 39, were arrested Tuesday (Oct. 6) following an investigation into the alleged mistreatment of children at their mansion in Arcadia, a Los Angeles suburb.

The couple, who have pleaded not guilty, face charges including conspiracy to commit child abuse and dissuading witnesses.

Prosecutors allege they subjected 15 children, some as young as two, to repeated violence, sometimes encouraging nannies to administer beatings.

But Xuan was already on law enforcement’s radar because of suspected criminal activity at a commercial property he controlled in nearby El Monte.

Underground Gaming & Drug Busts

According to court filings examined by The Los Angeles Times, El Monte police repeatedly raided Xuan’s commercial property over a three-year period following a December 2021 tip about an unlicensed nightclub.

During that initial raid, officers stopped a driver leaving the premises with five pounds of methamphetamine. Inside the complex, detectives uncovered a hidden casino floor equipped with electronic gambling devices, poker tables, mahjong setups, and cash.

Subsequent raids yielded counterfeit currency, bulk marijuana, a concealed handgun, and a psychedelic mushroom cultivation operation. During a December 2024 sweep, a man managing the tables allegedly told detectives he was hired by a syndicate known as “the six friends.”

Shell Companies & Felons

The city’s lawsuit alleges Xuan and other defendants were involved in a sophisticated criminal enterprise operating across multiple properties.

Investigators also linked the complex to Haoren Ma, a convicted felon nicknamed “Dragon,” who had previously served federal prison time for conspiracy, identity theft, and immigration-related offenses.

During a March 2023 search, police uncovered a psychedelic mushroom cultivation operation, along with drugs and a concealed handgun, according to ABC7.

The city alleges Xuan transferred ownership of the complex between companies he controlled to conceal his involvement and frustrate enforcement efforts.

However, Xuan has not been convicted of operating an illegal casino, and the allegations in the civil lawsuit remain separate from the child-abuse prosecution.

Arrest in Suburban Mansion

While municipal officials fought to shutter the gambling operation, Xuan’s legal troubles escalated dramatically when police investigated his Arcadia home.

Authorities initiated a welfare check after a two-month-old infant was hospitalized with severe head trauma. A subsequent search revealed more than 30 surveillance cameras throughout the mansion, which prosecutors allege Xuan and Zhang used to monitor and direct nannies to beat children in their care.

Police removed 21 children from the residence, most born through surrogacy arrangements.

Xuan and Zhang pleaded not guilty to child abuse and witness tampering charges. If convicted on the abuse counts, Xuan faces up to 17 years in state prison, while Zhang faces up to 11 years.

The couple has denied the allegations via their attorney.