May 17, 2024 at 12:06PM
The U.S. Department of Justice charged two suspects for leading a crime ring that laundered over $73 million from cryptocurrency scams known as “pig butchering.” Victims were lured through messaging and social media platforms, with funds drained into accounts under the fraudsters’ control. The defendants face up to 20 years in prison.
Key takeaways from the meeting notes:
– The U.S. Department of Justice charged two suspects, Daren Li and Yicheng Zhang, for leading a crime ring that laundered at least $73 million from cryptocurrency investment scams referred to as “pig butchering.”
– Pig butchering scams involve criminals approaching targets through messaging apps, dating platforms, or social media to introduce investment schemes that drain victims’ cryptocurrency wallets.
– The defendants and their accomplice moved millions transferred by pig butchering victims to U.S. bank accounts linked to shell companies, as well as to domestic and international bank accounts and cryptocurrency platforms to conceal their source and ownership.
– The funds were converted into cryptocurrency, including USDT (Tether), and a total of over $341 million in cryptocurrency was discovered in one of the crypto wallets used for money laundering.
– Communication between the suspects and their accomplices revealed details regarding commissions, information on the shell companies used in the money laundering process, victim details, and interactions with U.S. financial institutions.
– Brian Lambert, Assistant Director of Investigations of the U.S. Secret Service, highlighted the threat presented by complex financial fraud schemes such as pig butchering and mentioned that over $1.1 billion in financial fraud was recovered in 2023.
– Li and Zhang face charges of conspiracy to commit money laundering and six counts of international money laundering, with a maximum penalty of 20 years in prison for each count if convicted.
– In December, the U.S. Department of Justice also charged four other suspects—Lu Zhang, Justin Walker, Joseph Wong, and Hailong Zhu—for their alleged involvement in a pig butchering scheme that led to over $80 million in victim losses.
– The FBI’s 2023 Internet Crime Report warned of a significant increase in investment fraud, with a particular rise in cryptocurrency-related investment fraud from $2.57 billion in 2022 to $3.96 billion in 2023.