An indictment was unsealed in the Central District of California, charging two Chinese nationals with leading roles in a scheme to launder proceeds from cryptocurrency investment scams. The individuals involved are Daren Li, 41, a dual citizen of China and St. Kitts and Nevis, and Yicheng Zhang, 38, a Chinese national residing in Temple City, California.
Deputy Attorney General Lisa Monaco stated that "Cryptocurrency investment scams exploit the borderless nature of virtual currency and online communications to defraud victims." She further announced the arrests of these two foreign nationals for allegedly laundering at least $73 million tied to an international crypto investment scam.
Court documents reveal that Li, Zhang, and other conspirators managed an international syndicate that laundered proceeds of cryptocurrency investment scams. These schemes are also known as “pig butchering.” Victims were fraudulently induced into transferring millions of dollars to U.S. bank accounts opened in the names of dozens of shell companies. A network of money launderers then facilitated the transfer of those funds to other domestic and international bank accounts and cryptocurrency platforms.
Principal Deputy Assistant Attorney General Nicole M. Argentieri said that "Money laundering is critical to the success of these scams," emphasizing the importance of disrupting such financial networks.
U.S. Attorney Martin Estrada for the Central District of California stressed on educating oneself about such financial frauds as they pose a dangerous threat to Americans' financial wellbeing.
Li and Zhang allegedly instructed co-conspirators to open bank accounts in various shell companies' names. Once victims sent funds to these companies, they were transferred overseas to Deltec Bank in The Bahamas. These funds were then converted into cryptocurrency and sent to virtual-asset wallets.
Assistant Director Brian Lambert of the U.S. Secret Service highlighted that complex financial fraud schemes like pig butchering present a clear threat to America's financial infrastructure.
Both Li and Zhang face charges for conspiracy to commit money laundering and six counts of international money laundering. If convicted, they could face a maximum penalty of 20 years in prison on each count.
The U.S. Secret Service’s Global Investigative Operations Center is investigating the case with assistance from several other agencies. The National Cryptocurrency Enforcement Team (NCET) and U.S. Attorney’s Office for the Central District of California are jointly prosecuting the case.
The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. It sets strategic priorities regarding digital asset technologies, identifies areas for increased investigative focus, and collaborates with domestic and foreign government agencies as well as the private sector to investigate and prosecute crimes involving cryptocurrency and digital assets.
If you or someone you know is a victim of a cryptocurrency investment fraud, report it to IC3.gov.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.