El Monte Property Raids Uncover Crime Links and Surrogacy Controversy

The initial raid by El Monte police on Pacific Place, a gated complex of office buildings and warehouses, unveiled an illegal casino. Inside were electronic gambling tables, as reported by a detective in a search warrant affidavit. On December 9, 2021, police seized these machines, along with cash and methamphetamine. Subsequent raids over three years at the Valley Boulevard property revealed a gambling parlor, marijuana stash house, and even a psilocybin mushroom grow.

A particularly surprising discovery occurred at a mansion in Arcadia owned by the property owner. Police found 15 children, mostly toddlers. Guojun Xuan, aged 65, claimed he fathered 22 children, most through surrogates. Detectives were unsure if this indicated human trafficking or a desire for a large family, as Xuan and his partner, Sylvia Zhang, suggested. The FBI was asked to investigate due to money transfers to surrogates and interstate travel.

Xuan’s ownership of the crime-laden El Monte property adds mystery to the situation. No charges have been filed against Xuan or Zhang, despite their connections to illegal activities. In an interview, Zhang denied human trafficking involvement and attributed her large family desire to China’s one-child policy. Speculation surrounding the case gained media attention, with derogatory labels like ‘twisted baby factory’ appearing in tabloids.

The Arcadia home of Sylvia Zhang and Guojun Xuan. (Allen J. Schaben/Los Angeles Times)

In September, El Monte filed a civil abatement claim against Xuan and associates, outlining alleged ongoing illegal activities on the property. Evidence included drugs, firearms, and counterfeit currency. The first police tip in 2021 suggested Pacific Place functioned as a ‘possible illegal nightclub.’ A man stopped after leaving the premises led to a search warrant discovery of methamphetamine in his car.

Property records show Xuan purchased the 116,160-square-foot property for $10.5 million through Hongxing Investment. The location served as the headquarters for his real estate business, owning numerous properties. A business associate described Xuan as a significant investor known for acquiring foreclosed properties at auction. A map in Xuan’s office showed his extensive property holdings across Los Angeles and Orange counties.

• Xuan and Zhang both divorced their previous spouses within a 10-day span in 2021, court records reveal.
• Xuan fathered a young child, granted custody after the mother returned to China.
• A birth certificate filed in court lists Xuan having another child with Zhang at Riverside Hospital, though whether a surrogate was involved is unclear.

A company named Mark Surrogacy was registered at Xuan’s Arcadia address, with business records listing Zhang as its manager. The company purportedly combined surrogacy and real estate activities.

Police returned to Pacific Place in March 2023 following Zhang’s report of an assault. Officers uncovering a mushroom grow operation inside found trays, jars, and petri dishes containing fungi. They confiscated 1,715 pounds of mushrooms and 95 pounds of cannabis wax. The tenant, Haoren ‘Dragon’ Ma, had a criminal history, including previous law enforcement attention for operating immigration service frauds.

During a 2014 sentencing, Ma expressed remorse and a desire to return to China and avoid crime in the future. Despite this, he was later found near Pacific Place with illegal substances in 2023.

El Monte authorities continued their investigation into Xuan’s properties. By December 2024, a fifth raid uncovered gambling and drug paraphernalia, including counterfeit money.

On May 7, 2025, a social worker alerted Arcadia police after Zhang brought an injured child to the hospital. The baby showed signs of possible abuse. Detectives had a search warrant for the Arcadia home, revealing a ‘home school-type atmosphere’ with organized classrooms.

• Six nannies cared for children, who all had buzzcut hairstyles.
• Detectives discovered surveillance footage showing possible emotional and physical abuse by nannies.
• Zhang claimed to be the biological mother, with most children born to surrogates.

In May 2025, Xuan and Zhang were arrested but released after prosecutors declined charges. Arcadia police sought further video evidence for potential child abuse charges. The Los Angeles County Department of Children and Family Services has taken custody of the children since then.

Arcadia detectives, alongside other agencies, continue to review footage to strengthen the child abuse investigation. A surrogate representative confirmed that one of the children is now in foster care.