DOJ charges two Chinese nationals in $73m crypto scam

The
United
States
Justice
Department
has
arrested
two
Chinese
nationals
behind
a
$73
million
money
laundering
scheme.

According
to
a
May
17

announcement,
the
accused
funneled
illicit
funds
via
multiple
U.S.
financial
institutions
and
later
converted
them
to
the
stablecoin
USDT.

The
accused,
Daren
Li,
is
a
dual
citizen
of
China
and
St.
Kitts
and
Nevis.
His
associate,
Yicheng
Zhang,
is
a
Chinese
national
residing
in
Temple
City,
California.

Li
and
Zhang,
along
with
other
accomplices,
operated
a
money
laundering
network
that
washed
millions
of
dollars
acquired
via
“pig
butchering”
crypto
scams. 

These
scams
usually
start
with
the
bad
actors
gaining
the
trust
of
the
victims
and
then
asking
them
to
make
large
investments
in
lucrative
schemes
when
they
are
convinced.
Once
the
victim
transfers
the
funds,
the
fraudsters
disappear
with
the
money.

The
duo,
in
this
case,
instructed
their
accomplices
to
open
multiple
U.S.
bank
accounts
under
the
guise
of
“dozens
of
shell
companies,”
the
announcement
noted.
The
group
made
victims
transfer
millions
into
these
accounts,
and
all
the
activities
were
monitored
by
Li
and
Zhang.

Once
the
funds
were
in
place,
they
were
transferred
to
different
domestic
and
international
bank
accounts.

Regulators
flagged
several
accounts
as
having
been
created
at
Deltec
Bank
in
The
Bahamas.
At
least
one
of
these
accounts
was
allegedly
operated
using
Li’s
finance
assistance. 

Funds
from
these
accounts
were
converted
to
USDT,
which
has
become
a

popular
choice
amongst
scammers
over
the
past
years.

“A
cryptocurrency
wallet
involved
in
the
scheme
received
more
than
$341
million
in
virtual
assets,”
the
DOJ
stated.

Li
was
apprehended
at
Atlanta’s
airport
in
the
U.S.
state
of
Georgia
on
April
12.
Subsequently,
Zhang
was
caught
in
Los
Angeles
on
May
16.

The
pair
faces
six
counts
of
international
money
laundering
and
conspiracy
to
launder
money.
If
proven
guilty,
they
are
looking
at
a
maximum
sentence
of
20
years
for
each
count.

Pig
butchering
scams
are
estimated
to
have
made
upwards
of
$75
billion
from
victims
around
the
globe,
per
recent

research. 

Last
month,
the
Brooklyn
District
Attorney’s
Office

cracked
down
on
one
such
scam
after
multiple
complaints
were
filed
all
across
the
U.S.
Prior
to
that,
in
2023,
the
DOJ

froze
$9
million
in
USDT
stolen
from
70
victims
via
pig
butchering
scams.