A seven-count indictment was unsealed yesterday in Los Angeles charging four individuals for their alleged roles in a scheme to launder the proceeds of cryptocurrency investment scams and other fraudulent schemes involving millions of dollars in victim funds.
Lu Zhang, 36, of Alhambra, California; Justin Walker, 31, of Cypress, California; Joseph Wong, 32, Rosemead, California; and Hailong Zhu, 40, Naperville, Illinois, are charged with conspiracy to commit money laundering, concealment money laundering, and international money laundering. Zhang and Walker were arrested and made their initial appearances in federal court yesterday.
According to court documents, Zhang, Walker, Wong, and Zhu allegedly conspired to open shell companies and bank accounts to launder victim proceeds of cryptocurrency investment scams, also known as “pig butchering,” and other fraudulent schemes. They transferred the funds to domestic and international financial institutions. The overall fraud scheme in the related pig-butchering syndicate involved at least 284 transactions and resulted in more than $80 million in victim losses. More than $20 million in victim funds were directly deposited into bank accounts associated with the defendants.
According to court documents, “pig butchering” fraud schemes (a term derived from a foreign-language phrase used to describe these crimes) consist of scammers encountering victims on dating services, social media, or through unsolicited messages or calls, often masquerading as a wrong number. Scammers initiate relationships with victims and slowly gain their trust, eventually introducing the idea of making a business investment using cryptocurrency. Victims are then directed to other members of the scheme operating fraudulent cryptocurrency investment platforms and applications, where victims are persuaded to make financial investments. Once funds are sent to scammer-controlled accounts, the investment platform often falsely shows significant gains on the purported investment, and the victims are thus induced to make additional investments. Ultimately, the victims are unable to withdraw or recover their money, often resulting in significant losses for the victims.
If convicted, Zhang and Walker face a maximum penalty of 20 years in prison.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Martin Estrada for the Central District of California, and Special Agent in Charge William Mancino of the U.S. Secret Service’s Criminal Investigative Division made the announcement.
The U.S. Secret Service’s Global Investigative Operations Center is investigating the case.
The case is jointly prosecuted by the U.S. Attorney’s Office for the Central District of California and the Computer Crime and Intellectual Property Section’s (CCIPS) National Cryptocurrency Enforcement Team (NCET), which was established to combat the growing illicit use of cryptocurrencies and digital assets. CCIPS’ NCET conducts and supports investigations into individuals and entities that enable the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.
CCIPS/NCET Trial Attorney and Assistant U.S. Attorney Maxwell Coll for the Central District of California, CCIPS/NCET Trial Attorney Stefanie Schwartz, and Assistant U.S. Attorney Nisha Chandran for the Central District of California are prosecuting the case.
If you or someone you know is a victim, report it to the IC3.gov. In the report, please reference “Pig Butchering PSA” and include as much information as possible in the complaint including names of investment platforms, cryptocurrency addresses and transaction hashes, bank account information, and names and contact information of suspected scammers. Maintain copies of all communications with scammers and records of financial transactions.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Official news published at https://www.justice.gov/opa/pr/four-individuals-charged-laundering-millions-cryptocurrency-investment-scams