Taiwan's Bureau of Investigation has exposed a brazen pandemic-era fraud in which a con man and a well-connected lawyer pocketed US$38 million from Tzu Chi Foundation — one of the world's largest Buddhist charities — without performing a single day of actual work.
The scheme, carried out in 2021 amid Taiwan's desperate race for COVID-19 vaccines, only came to light five years later when money-laundering analysts flagged a suspicious transaction worth hundreds of millions of dollars and traced it to its source.
When investigators finally sat down with Tzu Chi's vaccine procurement staff in June 2026 and explained what had happened, the foundation's representatives were left visibly stunned.
The Taichung District Prosecutors' Office and the Ministry of Justice Investigation Bureau jointly announced on August 6, 2026, that they had broken the case: a conspiracy involving Chen Yu-xuan (陳昱瑄), former chairwoman of the Changhua County Bar Association; Li Shi-zong (李世宗), a well-known Taichung religious figure who promoted himself as a "spiritual mentor"; and Li's son Li Yi-ru (李易儒) — the alleged mastermind, who has since fled and is now a fugitive.
An Insider Connection and a Family Reputation
What gave the scheme its early credibility was a combination of personal relationships and borrowed prestige. Li Yi-ru had befriended a Tzu Chi overseas volunteer based in the United States — a relationship close enough that Li called the man his "honorary father." That honorary father, investigators say, carried real influence within Tzu Chi's senior leadership, and it was through this connection that Li first gained access to the organization's inner circle.
His family name also helped open doors. Li Shi-zong was well regarded in Taichung for teaching the Tao Te Ching and the Diamond Sutra, and Li Yi-ru had absorbed enough scriptural fluency to speak credibly to Tzu Chi's leadership. Chen Yu-xuan was herself a member of the Tzu Chi religious community — she called Li Shi-zong her honorary father and his wife Luo Wen-fang (羅玟芳) her mother, giving her a veneer of shared devotion that further lowered the organization's guard.
Fake Fosun Ties and Fabricated Corporate Endorsements
Against the backdrop of Taiwan's 2021 vaccine crisis, Li Yi-ru's credentials looked compelling. Hon Hai founder Terry Gou (郭台銘) had stepped forward to broker a deal with Shanghai Fosun Pharma for BNT doses; TSMC and Tzu Chi subsequently joined as co-funders, pooling resources to ease the island's acute shortage. Li seized on this moment to claim he was a major shareholder of Shanghai Fosun — the company controlling BNT distribution rights in China — a claim that, if true, would have made him the most important person in the room.
He and Chen Yu-xuan pushed further. According to investigators, they told Tzu Chi leadership that both Foxconn and TSMC had obtained their vaccines through Li, and that TSMC had paid Chen over US$10 million in legal fees for facilitating the procurement. Every claim was fabricated. The pair then secured what no legitimate broker would typically achieve: a personal audience with Tzu Chi's founder, Dharma Master Cheng Yen (證嚴上人) — one of Taiwan's most revered religious leaders.
Signed Contracts, Escalating Fees
The meeting with Dharma Master Cheng Yen proved decisive. On June 3, 2021, Tzu Chi signed a letter of intent with Li Yi-ru's group to purchase vaccines. Six days later, on June 9, Tzu Chi and Li's group formalized the arrangement with a consulting fee agreement of US$16 million for the procurement of three million BNT doses.
On June 18, 2021, then-President Tsai Ing-wen (蔡英文) officially approved the joint BNT purchase by Foxconn, TSMC, and Tzu Chi. Li moved quickly. On July 2, 2021, his group signed a supplementary agreement to expand the order to five million doses, adding another US$14 million and bringing the total consulting fee to US$30 million. Cold-chain logistics fees brought the originally negotiated ceiling to as much as US$60 million. They ultimately collected US$38 million — equivalent to NT$1.06 billion at the 2021 exchange rate.
US$60M Ask, Zero Work Performed
Not a dollar of it was earned. According to investigators, Li Yi-ru and Chen Yu-xuan contributed nothing whatsoever to the actual vaccine procurement. It was Foxconn and TSMC that handled every operational step of the BNT acquisition from start to finish. Li's group simply exploited the information gap between what Tzu Chi knew and what was actually happening — collecting US$38 million for work that was never theirs.
Taiwan's former COVID-19 command chief and current Executive Yuan political commissar Chen Shih-chung (陳時中) has since disclosed that he verbally warned Tzu Chi at the time to be cautious about fraud. The warning was not specific enough to halt the payments. The case remained buried until the Bureau of Investigation's Anti-Money Laundering Division noticed a suspicious transaction worth hundreds of millions of dollars, flagged it, and referred it to the Northern Investigation Bureau, which unraveled the full picture in March and April 2026. Investigators initially suspected Tzu Chi itself had an inside accomplice — the sums were simply too large to believe otherwise. Cross-referencing with Foxconn proved that assumption wrong and revealed the truth.
Gold Bars Stashed Beneath the Tatami Floor
To launder the proceeds, investigators say the group converted the funds into gold. On April 30 and May 20, 2026, prosecutors raided Li Shi-zong's luxury "Sky Tree" (天空之樹) residence in Taichung. Inside the Japanese-style mansion, beneath its tatami floors, lay four large safes containing 158 kilograms of gold bars valued at NT$659 million (approximately US$20.5 million at current rates) and NT$93 million (approximately US$2.9 million) in cash. Two Mercedes-Benz vehicles, bank deposits, and real estate holdings were also seized — bringing total recovered assets to more than NT$1 billion.
Six people were detained pending trial, including Chen Yu-xuan, Li Shi-zong, his wife Luo Wen-fang, and Chen's accountant. Prosecutors formally charged the group on August 6, 2026, with fraud, document forgery, and money laundering. Li Yi-ru — the alleged ringleader — had already vanished. The Taichung District Prosecutors' Office has issued a nationwide arrest warrant for his capture.
Tzu Chi's Stunned Reaction and Legal Response
When investigators summoned Tzu Chi's vaccine procurement staff in June 2026 and walked them through the full picture, the foundation's representatives grew increasingly unsettled as the details emerged — and ultimately realized they had been defrauded. Investigators asked whether Tzu Chi wished to file criminal charges. The foundation initially said only that it would cooperate with the investigation, stopping short of an explicit commitment to file a complaint.
On August 7, 2026, Tzu Chi issued a statement through its legal counsel: should the court find the defendants guilty and determine that criminal proceeds exist, the foundation's lawyers will petition the court to return those proceeds to Tzu Chi and will pursue civil damages — taking all necessary legal measures to defend the foundation's interests and protect the rights of its millions of donors. The Bureau of Investigation, for its part, said the suspects had "seriously disrupted social order and damaged social interests" by preying on a charitable organization's humanitarian mission during a public health crisis.
