The US Attorney’s Office mentioned that the suspects are Yicheng Zhang and Daren Li respectively over $73 million cryptocurrency scam. While all this was happening, both of them were involved in the operation of an international network that would launder money stolen through cryptocurrency investment frauds commonly known as “pig butchering.”
A federal agency described pig butchering as a scam where criminals gain the trust of their victims and then convince them to invest in fraudulent cryptocurrencies, sometimes requiring additional payments before realizing they have been defrauded. The ‘butchering’ or ‘slaughtering’ happens when the criminal steals from the victim’s assets. These crimes usually take place abroad with perpetuators scattered around.
Yicheng Zhang and Daren Li OVER $73 million cryptocurrency scam
According to authorities, Li and Zhang managed to force many victims into transferring millions of dollars into American bank accounts that they had opened under bogus shell companies whose only reason for existence was to aid money laundering associated with fraud.
Furthermore, when the victims sent money to the shell companies, the duo watched over those who subsequently transmitted them offshore to Deltec Bank in The Bahamas as court documents suggest. Other domestic and foreign accounts were also used for transferring funds including crypto platforms, so as to hide its origins.
It is claimed that over $73 million cryptocurrency scam were laundered this way by the two.
Afterwards, all these monies were converted into USDT or Tether cryptocurrency and forwarded to virtual asset wallets. Some of them received more than $341 million in digital assets through a certain crypto wallet involved in the scheme according to investigators.
“Chats which discussed things like commission structure for network coordinator, different shell company’s names, victim data and one call recording from a conspirator calling a U.S financial institution was further proof of extensive coordination about international money laundering activities,” added court documents.
Both Li and Zhang are charged with conspiracy to launder money and six counts of international money laundering. If found guilty they each count carries up 20 years behind bars.
On May 17th Zhang pleaded not guilty and is now being held in federal custody. Detention hearing will be on May 21st while trial day has been set on July 9th.
Scheduled for arraignment on May 20, Li, whom a federal magistrate judge has ordered jailed without bond.
“Sophisticated financial scams such as these are a dangerous threat to the financial wellbeing of all Americans,” said U.S. Attorney Martin Estrada. “While my office will continue to root out and punish these deceitful schemes, I encourage everyone to educate themselves on pig butchering and other kinds of financial fraud to protect their families against such predatory activity. Vigilance is key.”
The case remains under investigation by the U.S. Secret Service’s Global Investigative Operations Center.
If you may become victimized in cryptocurrency investment fraud you may report it at IC3.gov online.
Those filing a report should reference “Pig Butchering PSA” and include as much information as possible including names of investment platforms, cryptocurrency addresses and transaction hashes, bank account information, and names and contact information of suspected scammers.
Victims should also keep copies of all communication with scammers along with records of financial transactions.