The U.S. Department of Justice charged two suspects for allegedly leading a crime ring that laundered at least $73 million from cryptocurrency investment scams, also known as "pig butchering."
In pig butchering scams, criminals approach targets using various messaging apps, dating platforms, or social media platforms to build trust and introduce them to investment schemes that help them drain the victims' cryptocurrency wallets. Instead of investing the victims' funds as initially promised, the fraudsters siphon all their cryptocurrency to accounts and crypto wallets under their control.
Chinese nations Daren Li and Yicheng Zhang were arrested on April 12 at Hartsfield-Jackson Atlanta International Airport and yesterday in Los Angeles.
Court documents reveal that the defendants and their accomplice moved millions transferred by pig butchering victims to U.S. bank accounts linked to dozens of shell companies to various domestic and international bank accounts and cryptocurrency platforms to hide their source and ownership.
Li and Zhang reportedly directed associates to open these bank accounts, and they also monitored the transfer of more than $73 million to Deltec Bank in The Bahamas, where the money was converted into cryptocurrency, including USDT (Tether).
While investigating the scheme, law enforcement agents discovered over $341 million in cryptocurrency in one of the crypto wallets used for money laundering. Communications between the suspects and their accomplices also revealed details regarding commissions, information on the shell companies they used throughout the laundering process, victim details, and interactions with U.S. financial institutions.
"Complex financial fraud schemes such as pig butchering present a clear and present threat to the financial infrastructure of the United States as countless numbers of Americans continue to be victimized by this predatory activity," said Brian Lambert, Assistant Director of Investigations of the U.S. Secret Service.
"In 2023, the Secret Service with our partners recovered more than $1.1 billion in financial fraud and we are on pace to exceed that number this year."
Li and Zhang are charged with conspiracy to commit money laundering and six counts of international money laundering. They face a maximum penalty of 20 years in prison for each count if convicted.
In December, the U.S. Department of Justice charged four other suspects—Lu Zhang, Justin Walker, Joseph Wong, and Hailong Zhu—for their alleged involvement in a massive pig butchering scheme that led to over $80 million in victim losses.
The FBI's 2023 Internet Crime Report warned [PDF] that investment fraud investment scams saw a 38% increase from $3.31 billion in 2022 to $4.57 billion in 2023.
"In 2023, the losses reported due to Investment scams became the most of any crime type tracked by the IC3," the FBI said. "Within these numbers, investment fraud with a reference to cryptocurrency rose from $2.57 billion in 2022 to $3.96 billion in 2023, an increase of 53%."
Related Articles:
FBI warns of gift card fraud ring targeting retail companies
KuCoin charged with AML violations that let cybercriminals launder billions
US sanctions crypto exchanges used by Russian darknet market, banks
US woman allegedly aided North Korean IT workers infiltrate 300 firms
Brothers arrested for $25 million theft in Ethereum blockchain attack
Original Article Published at Bleeping Computer
________________________________________________________________________________________________________________________________
