U.S. Department of Justice: Two Chinese individuals arrested for laundering $73 million through cryptocurrency fraud.

According to a statement from the U.S. Department of Justice, two Chinese nationals have been arrested for their alleged involvement in a cryptocurrency investment scam money laundering scheme. The indictment unsealed in the Central District of California reveals the crackdown on foreign individuals' cryptocurrency criminal activities by the United States.

Chinese Money Launderers Arrested in the U.S.

Daren Li, 41 years old, holding dual citizenship of China and St. Kitts, residing in China, Cambodia, and the UAE, was arrested on April 12 at the Atlanta airport in the U.S. and later transferred to the Central District of California. Yicheng Zhang, 38 years old, of Chinese nationality, residing in Temple City, California, was arrested in Los Angeles.

Exploiting the Borderless Nature of Cryptocurrency

The U.S. Deputy Attorney General emphasized the global scope of cryptocurrency fraud and the determination to combat fraud: "Cryptocurrency investment scams use the borderless nature of virtual currencies and online communications to deceive victims."

"Pig Killing" Scam

Court documents show that Li, Zhang, and their co-conspirators managed an international criminal group responsible for laundering proceeds from "pig killing" scams. Victims were deceived into transferring millions of dollars into U.S. bank accounts set up by shell companies, with these funds later transferred to domestic and foreign bank accounts and cryptocurrency platforms to conceal their origins.

Fraud Exceeding $73 Million

This fraud scheme involved laundering over $73 million through U.S. financial institutions, with these funds being transferred to bank accounts in the Bahamas and converted into USDT. A cryptocurrency wallet associated with the scheme received over $341 million in virtual assets.

Li and Zhang instructed their fraud network to open bank accounts under various shell company names. Once funds were transferred to these accounts, they moved the funds to banks in the Bahamas. The funds were then converted into cryptocurrency and transferred to a virtual wallet controlled by Li. Zhang allegedly directly received funds from victims. Call records revealed an extensive structure, including commission structures, shell companies used, victim information, and video calls with U.S. financial institutions.

DOJ: Money Laundering Critical to Fraud

DOJ officials stated, "Money laundering is critical to these frauds, allowing fraudsters to move illicit proceeds and make them appear legitimate." This arrest demonstrates the DOJ's commitment to combating complex financial networks and holding criminals accountable, regardless of their location.

Over $1.1 Billion Recovered by the U.S. in 2023, Expected to Exceed This Year

Officials from the U.S. Secret Service said, "In 2023, the Secret Service and our partners recovered over $1.1 billion in financial fraud funds, and we are on track to exceed that number this year."

Two Chinese Face Up to 20 Years in Prison

Li and Zhang face charges of conspiracy to launder money and six counts of international money laundering. If convicted, they could face up to 20 years in prison for each charge.