Two Chinese nationals have been charged with masterminding at least $73 million in illegal money laundering, the United States Department of Justice announced Friday.
According to the DOJ, Darren Li, 41, a dual citizen of China and St. Kitts and Nevis, was arrested on April 12 at Hartsfield-Jackson Atlanta International Airport. Yicheng Zhang, 38, of Temple City, California, was arrested in Los Angeles on Thursday.
The pair have been charged with money laundering and six counts of international money laundering.
“Cryptocurrency investment scams use borderless virtual currency and online communications to defraud victims,” Deputy Attorney General Lisa Monaco said in a statement. “While fraud in the crypto market takes many forms and hides in far-flung locations, criminals are not above the law.
Li and Zhang are accused of instructing unnamed co-conspirators to open bank accounts in the name of shell companies, running an international syndicate of fraudulent funds from cryptocurrency investment scams known as “pork killings.”
Pork scams are a long-standing investment scam that involves fraudsters luring victims into cryptocurrency scams. The DOJ said victims were tricked into transferring millions into US bank accounts in shell companies set up by Lee and other co-conspirators.
Funds deposited into the account are sent to offshore accounts in the Bahamas and converted to Tether (USDT) and deposited into a wallet allegedly controlled by Lee. Zhang allegedly accepted the victims' money, the DOJ said.
While the pair were charged with embezzling $73 million, the DOJ said it received more than $341 million worth of “virtual assets” in wallets linked to the duo.
“As alleged in the indictment, Li and Zhang have embezzled millions of dollars from victims of cryptocurrency investment scams,” said Chief Deputy Assistant Attorney General Nicole M. Argentieri said in a statement. “Money laundering is critical to the success of these scams, allowing fraudsters to quickly mobilize illegal income and try to make it look legitimate.”
The arrests were made in cooperation with U.S. and international law enforcement, and are part of the agency's ongoing commitment to disrupt the entire cybercrime ecosystem and stop fraud in all financial markets. Li and Zhang face up to 20 years in federal prison if convicted.
In the year Since the collapse of FTX in November 2022, the US Department of Justice and policymakers have begun investigating and prosecuting cryptocurrency-related crimes.
In January, the DOJ indicted an Australian and two Americans in connection with a $1.9 billion crypto fraud involving DeFi platform HyperFund.
And in April, US Senator Elizabeth Warren – a long-time critic of crypto – called for the Departments of Homeland Security and Justice to report on the use of cryptocurrency to facilitate the distribution of child sexual abuse materials (CSAM), calling for an election payment for that market.
In the most high-profile cryptocurrency-related criminal case since Sam Bankman-Fried was sentenced to 25 years in federal prison in March, Binance founder and former CEO Changpeng ‘CZ' Zhao was convicted of money laundering and sentenced to four months in federal prison. . In April.
Edited by Andrew Hayward.
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