The U.S. Department of Justice has arrested two Chinese citizens linked to a money laundering scheme totaling $73 million.
As announced on May 17, the suspects funneled illicit funds through various U.S. financial institutions, subsequently converting them into the stablecoin USDT.
The primary suspect, Daren Li, holds dual citizenship in China and St. Kitts and Nevis. His accomplice, Yicheng Zhang, is a Chinese national residing in Temple City, California.
Li and Zhang, along with other accomplices, managed a money laundering network that processed millions of dollars obtained through “pig butchering” crypto scams.
These scams typically involve the perpetrators gaining the victims’ trust and persuading them to make significant investments in seemingly profitable schemes. Once the victims transfer their funds, the fraudsters vanish with the money.
In this case, the duo directed their accomplices to open multiple U.S. bank accounts under the pretense of “dozens of shell companies,” according to the announcement. Victims were instructed to transfer millions into these accounts, with all activities closely monitored by Li and Zhang.
Once the funds were secured, they were transferred to various domestic and international bank accounts.
Regulators identified several accounts established at Deltec Bank in The Bahamas, with at least one allegedly managed using Li’s financial assistance.
Funds from these accounts were converted to USDT, a stablecoin that has gained popularity among scammers in recent years.
The Department of Justice (DOJ) reported that a cryptocurrency wallet linked to the scheme received over $341 million in virtual assets.
Li was arrested at Atlanta’s airport in Georgia on April 12, while Zhang was apprehended in Los Angeles on May 16.
They face six counts of international money laundering and conspiracy to launder money. If convicted, each count carries a maximum sentence of 20 years.
Recent research estimates that pig butchering scams have defrauded victims worldwide of over $75 billion.
Last month, the Brooklyn District Attorney’s Office cracked down on a similar scam following numerous complaints filed across the U.S. Earlier in 2023, the DOJ froze $9 million in USDT stolen from 70 victims through pig butchering scams.
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