Crypto Money Laundering Trio Nabbed in $10M Bank Fraud Scheme

Three individuals are currently under scrutiny for using foreign cryptocurrency exchanges to launder the proceeds of a scheme targeting multiple financial institutions in the New York metropolitan area.

According to a statement from U.S. Attorney Damian Williams, the trio successfully deceived banks in the New York region, extracting a sum exceeding $10 million. Their strategy involved converting the illicit gains into cryptocurrency. Williams released a statement on Thursday detailing the alleged actions of Zhong Shi Gao, Naifeng Xu, and Fei Jiang. These individuals are accused of embezzling millions of dollars from various financial institutions in the New York metropolitan area between 2018 and 2022.

Law enforcement officials disclosed that the three suspects executed their scheme by assuming the roles of victims of fraudulent money transfers. This tactic led financial institutions to credit their accounts with the purported amounts of unauthorized transfers, effectively doubling their gains, as outlined in the indictment.

Reacting to these activities, U.S. Attorney Damian Williams issued a strong warning, declaring, 

"These charges should serve as a cautionary tale to fraudsters and cybercriminals who believe they can use cryptocurrency to conceal their identities. Working alongside our partner agencies, we will locate you and hold you accountable for your crimes."

The accused individuals—Zhong Shi Gao, Naifeng Xu, and Fei Jiang—have all been apprehended by the Federal Bureau of Investigation (FBI). They now face four criminal charges in the U.S. District Court for the Southern District of New York: bank fraud conspiracy, conspiracy to commit wire fraud affecting a financial institution, money laundering conspiracy, and aggravated identity theft. The combined maximum sentence for all charges could potentially result in nearly 100 years of imprisonment, according to the information released.

Authorities revealed that the accused trio enlisted the help of foreign nationals from China and Taiwan to open U.S. bank accounts. These accounts were subsequently used to manage transfers that were falsely presented as unwanted transactions.

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