2 arrested for allegedly laundering over $73 million through cryptocurrency scams

Two people have been arrested for allegedly laundering over $73 million through cryptocurrency investment scams.

According to the U.S. Attorney’s Office, the suspects were identified as Yicheng Zhang, 38, of Temple City and Daren Li, 41, a dual citizen of China and St. Kitts and Nevis.

The pair are accused of playing a leading role in running an international syndicate that laundered money from cryptocurrency investment scams, also known as “pig slaughter.”

“In pig slaughtering, fraudsters build trust with a victim before convincing them to invest in a fraudulent cryptocurrency scheme,” federal officials explained. “Often the victim is tricked into making additional payments before realizing they are a victim of fraud. The “slaughter” or “slaughter” occurs when the criminal steals the victim’s assets or funds. The perpetrators behind these schemes are often based abroad.”

Li and Zhang’s victims were convinced to transfer millions of dollars to U.S. bank accounts opened under the names of shell companies, authorities said. The sole purpose of these companies was to facilitate the laundering of fraud proceeds.

After the victims sent money to the shell companies, the pair supervised lower-level co-conspirators who transferred the funds overseas to bank accounts at Deltec Bank in the Bahamas, court documents say. In order to conceal the original origin of the money, funds were also transferred to other domestic and foreign accounts as well as to cryptocurrency platforms.

Through this scheme, the duo is said to have laundered over $73 million.

The funds were then converted into the cryptocurrency USDT or Tether and sent to virtual asset wallets. A cryptocurrency wallet involved in the scheme received more than $341 million in virtual assets, investigators said.

“The communication revealed extensive coordination to facilitate international money laundering, including chats about the network’s commission structure and the various.”
“The shell companies used, victim information and at least one video of a conspirator calling a U.S. financial institution,” court documents added.

Both Li and Zhang were charged with conspiracy to commit money laundering and six counts of international money laundering. If convicted, they each face up to 20 years in prison.

On May 17, Zhang pleaded not guilty and remains in federal custody. A detention hearing is scheduled for May 21 and a trial is scheduled for July 9.

Li, who a federal judge ordered held without bail, is scheduled to be arraigned on May 20.

“Sophisticated financial frauds like this pose a dangerous threat to the financial well-being of all Americans,” said U.S. Attorney Martin Estrada. “While my office will continue to root out and punish these fraudulent schemes, I encourage everyone to educate themselves about hog slaughter and other types of financial fraud to protect their families from such predatory activities. “Vigilance is key.”

The case remains under investigation by the U.S. Secret Service’s Global Investigative Operations Center.

Anyone who may be a victim of a cryptocurrency investment scam should report it online at IC3.gov.

Anyone filing a report should refer to the Pig Butchering PSA and provide as much information as possible, including names of investment platforms, cryptocurrency addresses and transaction hashes, bank account information, and names and contact information of suspected fraudsters.

Victims should also keep copies of all communications with scammers as well as records of financial transactions.