According to Friday’s announcement by the US Department of Justice (DoJ), a duo from China has been charged with operating a fraudulent cryptocurrency investment scheme pig butchering scam.
That relied on numerous shell entities and laundered no less than $73 million out of unwary investors.
Yicheng Zhang, a 38-year-old man, was apprehended in Los Angeles after an unsealed indictment from California’s Central District court became known on Thursday.
Daren Li, a 42-year-old with dual citizenship of China and St. Kitts and Nevis, who was the other suspect in question, was apprehended at Atlanta’s Hartsfield-Jackson International Airport earlier this year in April.
According to Lisa Monaco, the US Deputy Attorney General, cryptocurrency investment scams take advantage of the virtual currency’s boundaryless characteristics and internet-based communications for fraudulent purposes.
The authorities have reported that the duo participated in a form of cryptocurrency fraud referred to as “pig butchering,” which is currently an expanding global field. This fraudulent industry entails tricksters gaining victims’ trust and enticing them into gradually contributing more money towards a deceptive investment over time.
In the end, the perpetrators eradicate all of the victim’s accounts until they are left with no funds.
Monaco stated that despite the various forms of fraud present in crypto markets and its tendency to hide in distant locations, those responsible for it can be held accountable under the law.
Scam involving money laundering on a global scale.
The two suspects, alleged to be masterminds of a global criminal organization, purportedly employed accomplices to establish American bank accounts using fictitious business titles in advance.
The perpetrators employed a deceitful tactic to prompt the victims into transferring funds into dormant bank accounts. Subsequently, these deposits were channeled through American financial establishments and eventually transferred to offshore banks situated in the Bahamas for money laundering purposes.
The money that was stolen underwent conversion into Tether (USDT), a type of cryptocurrency stablecoin linked to the US dollar. Afterwards, it got transferred into multiple digital wallets, one of which was being managed by Li himself.
As per the DoJ, a single cryptocurrency wallet purportedly accumulated over $341 million in digital assets.
Nicole Argentieri
According to Nicole Argentieri, who leads the Criminal Division of the Justice Department as Principal Deputy Assistant Attorney General
Money laundering plays a vital role in facilitating these scams by enabling fraudsters to swiftly transfer illegal profits and make them seem lawful.
The authorities stated that the suspects had engaged in extensive coordination to enable international money laundering.
Their communications involved discussions about commission structures for their network, utilization of multiple shell companies and information regarding victims.
Moreover, one conspirator shared a video calling out a US financial institution during these chats.
According to the Justice Department, Zhang and Li have been charged with both conspiracy to commit money laundering as well as six counts of international money laundering.
They may be sentenced for up to 20 years in prison per charge if they are proven guilty.
According to the DoJ, over $1.1 billion in illicit funds was retrieved by the US Secret Service in 2023 from pig butchering scam and it is anticipated that this amount will be surpassed during next year – 2024.
