U.S. DOJ Charges Two Chinese Nationals in $73 Million Crypto Laundering Scam

The U.S. Department of Justice (DoJ) has charged two Chinese nationals for their roles in a complex scam that laundered at least $73 million through shell companies. Daren Li, 41, and Yicheng Zhang, 38, were apprehended in Atlanta and Los Angeles on April 12 and May 16, respectively.

“These individuals are accused of spearheading a scheme to launder funds linked to an international crypto investment fraud,” said Deputy Attorney General Lisa Monaco. Prosecutors allege that Li, Zhang, and their associates ran a global network that funneled money from victims through fraudulent cryptocurrency investments.

Victims were tricked into transferring millions to U.S. bank accounts set up under fake company names. A network of money launderers then transferred these funds to various domestic and international accounts and cryptocurrency platforms, all in a bid to hide the money’s origins and ownership.

The funds were allegedly funneled through U.S. financial institutions to accounts in the Bahamas. From there, they were converted into USDT (Tether) and sent to cryptocurrency wallets, including one controlled by Li. Li and Zhang oversaw associates who moved the money to accounts at Deltec Bank in the Bahamas, with Zhang directly receiving some victim funds.

Both men face charges of conspiracy to commit money laundering and six counts of international money laundering. Each charge carries a potential sentence of up to 20 years in prison.

These scams, known as "pig butchering," involve fraudsters using messaging apps, dating services, and social media to build trust with wealthy, often lonely targets, convincing them to invest in schemes promising high returns. The victims’ money is then funneled into wallets controlled by the scammers.

In December 2023, the U.S. government charged four individuals for their involvement in similar schemes that netted more than $80 million. Last month, Google filed a lawsuit against two developers from Shenzhen and Hong Kong for using fake crypto apps to steal cryptocurrency through similar tactics.

Countries like Burma, Cambodia, Laos, Malaysia, Myanmar, and the Philippines have become hotspots for romance scams. Criminals lure people with promises of lucrative jobs, only to force them into "scam factories" where they are coerced into participating in fraudulent activities.

A BBC News report highlighted the plight of a 24-year-old Sri Lankan recruited for a data entry job but forcibly taken to Myawaddy, a town in southeastern Myanmar, where he was detained in a camp run by "Chinese-speaking gangmasters." The man, identified as Ravi, was tortured for refusing to participate, including being given electric shocks.

In another case, a 21-year-old from India was trafficked to Myanmar along with others but was eventually released after paying a ransom.