Xing Zheng, a 35-year-old resident of Queens, New York, has been sentenced to 28 months in prison, followed by three years of supervised release, for his involvement in a money-laundering conspiracy. The sentence comes after Zheng's plea of guilty to laundering around $2.98 million from various sources, including stolen Social Security retirement funds and state workforce agencies' COVID-19 funds.
United States Attorney David Metcalf announced the sentencing, which was handed down by United States District Court Judge Timothy J. Savage. In addition to his prison term, Zheng is required to pay $426,044 in restitution to the Social Security Administration and various state workforce agencies and a forfeiture judgment of $745,000.
Last December, Zheng pleaded guilty to a single count of conspiracy to commit money laundering. Court documents revealed that Zheng and an unidentified coconspirator, who used the aliases "Christian Dasilva" and "Christian Hernandez," agreed to launder fraud proceeds. This involved filing fraudulent online applications for SSA Retirement Insurance Benefit (RIB) and COVID-19 Pandemic Unemployment Act (PUA) funds using stolen identities. The benefits were deposited into bank accounts controlled by the conspirators.
One of Zheng's coconspirators, Myrna Ortiz, 46, of Philadelphia, was linked to the operation following an online relationship with "Christian." Ortiz was found complicit in the fraud, having opened several bank accounts to receive the illegal funds, which were subsequently laundered back to her partner via gift cards.
The conspiracy included the sale of debit and gift cards to Zheng, exchanged for cryptocurrency—money known to have come from illicit activities. Zheng laundered approximately 1,565 cards during the scheme, retaining about 25% of their value.
U.S. Attorney Metcalf emphasized Zheng's role in the operation, stating, "While Zheng did not personally participate in the fraud against the government, he knew that the money he was laundering was criminally derived. Nonetheless, he was happy to participate, launder funds on a near-daily basis, and take his 25% cut, even as his crimes helped perpetuate the underlying fraud."
Wayne A. Jacobs, Special Agent in Charge of FBI Philadelphia, expressed the FBI's commitment to protecting relief programs, stating, "The millions of dollars fraudulently obtained in this case were intended to support struggling Americans during a time of unprecedented crisis — not to line the pockets of those driven by greed."
SSA Office of the Inspector General's Colleen Lawlor noted, "This 28-month prison sentence holds Mr. Zheng accountable for stealing money from rightful beneficiaries who rely on these funds to survive."
Syreeta Scott from the Department of Labor further commented, "Xing Zheng and his co-conspirators defrauded multiple state workforce agencies by filing for unemployment insurance (UI) benefits in the names of identity theft victims who were not entitled to such benefits."
The collaborative effort in investigating this case involved the Social Security Administration Office of Inspector General, the FBI, and the Department of Labor Office of Inspector General. Special Assistant United States Attorney Megan Curran prosecuted the case.