Three individuals, including two Chinese nationals, have been arrested on federal criminal complaints for allegedly setting up shell companies to launder over $13 million from victims of investment scams known as "pig butchering." The arrests took place in Santa Ana, California.
The defendants are Mingzhi Li, 24, also known as "Zheng Lin," and Zeyue Jia, 23, also known as "Jiao Jiao Liu," both from Downtown Los Angeles, and Jun Shi, 55, from San Gabriel. They face charges of operating an unlicensed money transmitting business, which carries a maximum sentence of five years in federal prison.
Li and Jia are Chinese citizens who entered the United States on student visas that have expired. A federal magistrate judge has ordered them jailed without bond. Shi was released on a $20,000 bond. Their arraignments are scheduled for March 17 in U.S. District Court in Los Angeles.
According to affidavits filed with the complaints, Shi established Magic Location Trading LLC and Stone Water Trading LLC on December 7, 2022. Both companies operated out of the same address in downtown Los Angeles and functioned as money service businesses without proper registration with the Financial Crimes Enforcement Network (FinCEN) or the State of California.
The complaint states that Shi and Li opened bank accounts for Magic Location while Jia did so for Stone Water. These accounts received funds from investment fraud victims through numerous wire transfers totaling millions of dollars. The funds were then allegedly transferred to overseas bank accounts and used for personal expenses.
Victims believed they were funding legitimate investment accounts on digital platforms involving commodities like gold contracts or virtual currencies such as Bitcoin. "Pig butchering" schemes involve scammers establishing relationships with victims via dating services or social media before introducing fraudulent investment opportunities.
One example detailed in the complaint involves a 72-year-old Minnesota man who was convinced by a Chinese woman he met on WhatsApp to invest in a platform called "Enkuu." He wired significant sums to Stone Water and Magic Trading but was later unable to withdraw his investments.
The FBI is investigating this case. Assistant United States Attorneys Kristin N. Spencer and Angela C. Makabali are prosecuting these cases.
A criminal complaint is merely an allegation; all defendants are presumed innocent until proven guilty beyond a reasonable doubt in court.