The U.S. Department of Justice announced Friday that two Chinese nationals have been indicted on charges of leading a massive cryptocurrency fraud that netted at least $73 million in laundered funds.
According to the Department of Justice, Darren Lee, 41, a dual citizen of China and St. Kitts and Nevis, was arrested at Hartsfield-Jackson Atlanta International Airport on April 12. Yicheng Zhang, 38, of Temple City, California, was arrested Thursday in Los Angeles.
The two were charged with money laundering and six counts of international money laundering.
“Cryptocurrency investment scams take advantage of the borderless nature of virtual currencies and online communications to defraud victims,” Deputy Attorney General Lisa Monaco said in a statement. “Scams in the cryptocurrency market take many forms and hide in remote places, but their perpetrators are not beyond the reach of the law.
Li and Zhang are accused of directing unnamed co-conspirators to open bank accounts in the names of shell companies and running an international syndicate that laundered money from a cryptocurrency investment scam known as “pig slaughter.”
Pig slaughter scams are a type of long-term investment scam where scammers lure victims into cryptocurrency schemes. The DOJ said victims were tricked into transferring millions of dollars to U.S. bank accounts of shell companies set up by Lee and other co-conspirators.
The funds deposited into the account are transferred to an offshore account in the Bahamas, then converted to Tether (USDT) and deposited into a wallet known to be controlled by Mr. Lee. It is known that Mr. Jang also received funds from victims.
The Justice Department said the two were accused of laundering $73 million, while receiving $341 million worth of “virtual assets” from wallets they were linked to.
“According to the indictment, Li and Zhang helped launder millions of dollars obtained from victims of cryptocurrency investment fraud,” Deputy Attorney General Nicole M. Argentieri said in a statement. She said: “Money laundering is critical to the success of these scams, as it allows fraudsters to move illicit proceeds quickly and make them appear legitimate.”
The arrests were made through collaboration between U.S. and international law enforcement agencies and reflect “the agencies’ ongoing efforts to disrupt the entire cybercrime ecosystem and disrupt fraud in all financial markets.” If convicted, Lee and Jang face up to 20 years in federal prison.
Since the collapse of FTX in November 2022, the U.S. Department of Justice and policymakers have stepped up investigations and prosecutions of cryptocurrency-related crimes.
In January, the DOJ indicted an Australian and two Americans on charges of operating a $1.9 billion cryptocurrency fraud based on DeFi platform HyperFund.
And in April, U.S. Senator Elizabeth Warren, a longtime cryptocurrency critic, briefed the Department of Homeland Security and the Department of Justice on the use of cryptocurrencies to facilitate the spread of child sexual abuse material (CSAM). requested it. That market.
This is the most prominent cryptocurrency-related criminal case since Sam Bankman-Fried was sentenced to 25 years in federal prison in March, and Binance founder and former CEO Changpeng ‘CZ’ Zhao ‘ Zhao was sentenced to four months in federal prison after being found guilty of money laundering offenses. In April.
Editor: Andrew Hayward
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