California ‘House of Horrors’ Suspect Linked to Illegal Casino and Drug Operations

A California property investor accused alongside his wife of abusing more than a dozen children born through surrogacy has also been linked to an illegal casino and suspected drug operations at a property he owned.

Guojun Xuan, 66, and 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.

Illegal Casino Raids

According to a September 2025 civil complaint filed by the City of El Monte, police repeatedly raided the Pacific Place commercial complex on Valley Boulevard, discovering illegal gambling operations and evidence of drug trafficking.

The Los Angeles Times, which examined police search warrant affidavits, reported that officers first raided the property in December 2021 after receiving a tip about a possible illegal nightclub.

Police had stopped a man leaving the premises and discovered five pounds of methamphetamine in his vehicle.

Inside the complex, officers found an underground casino equipped with electronic gambling tables. They seized gambling machines, cash, and several pounds of methamphetamine.

Police returned several times over the following three years.

During a December 2024 raid, detectives discovered gambling machines, poker and mahjong tables, counterfeit currency, and trash bags containing marijuana.

A man detained at the warehouse allegedly told investigators he was paid to manage the gambling operation by a mysterious group known as “the six friends.”

‘Persistent Criminal Enterprise’

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.

Children Removed From Mansion

That investigation began in May 2025 after a two-month-old boy was hospitalized with serious head injuries.

Police subsequently discovered numerous children living in the couple’s mansion, where more than 30 surveillance cameras allegedly monitored their activities.

Authorities ultimately removed 21 children from the couple’s custody. Most had been born through surrogacy arrangements.

Prosecutors allege the couple watched footage of children being beaten and sometimes encouraged the abuse.

Xuan faces up to 17 years and four months in prison if convicted, while Zhang faces up to 11 years and eight months.

The couple has denied the allegations via their attorney.