The individuals, Daren Li, 41, and Yicheng Zhang, 38, were arrested in Atlanta and Los Angeles on April 12 and May 16, respectively.
The foreign nationals have been “charged for leading a scheme to launder funds to the tune of at least $73 million tied to an international crypto investment scam,” Deputy Attorney General Lisa Monaco said.
Prosecutors have accused Li, Zhang, and their co-conspirators of managing an international syndicate that laundered the funds obtained via cryptocurrency investment scams.
As part of the fraudulent operation, victims are said to have been tricked into transferring millions of dollars to U.S. bank accounts that were opened in the name of various shell companies.
“A network of money launderers then facilitated the transfer of those funds to other domestic and international bank accounts and cryptocurrency platforms in a manner designed to conceal the source, nature, ownership, and control of the funds,” the DoJ said.
The funds are believed to have been laundered through U.S. financial institutions to bank accounts in the Bahamas, and then subsequently converted to USDT or Tether and sent to cryptocurrency wallets, including one controlled by Li.
In particular, Li and Zhang oversaw the lower-level co-conspirators who moved the proceeds overseas to bank accounts at Deltec Bank in the Bahamas. At least one of the bank accounts was operated with the financial assistance of Li, with Zhang also directly receiving victim funds, according to the unsealed indictment.
Both of them have been charged with conspiracy to commit money laundering and six substantive counts of international money laundering. If convicted, they face up to 20 years in prison on each count.
Pig butchering scams often involve fraudsters approaching lonely, rich targets using messaging apps, dating services, and social media platforms to build trust and persuade them to invest in different schemes that claim to offer better returns, only for their money to be transferred to wallets under their control.
