CryptoLaunder Quartet: Unveiling the $80M Scam
The Department of Justice (DOJ) in the United States has pressed charges against four individuals, accusing them of participating in the illicit laundering of millions of dollars obtained through scams in the realm of cryptocurrency investments.
As per an official statement released by the DOJ, the quartet comprises Lu Zhang from Alhambra, California; Justin Walker from Cypress, California; Hailong Zhu from Naperville, Illinois; and Joseph Wong from Rosemead, California, aged 36, 31, 40, and 32, respectively. Allegedly, these individuals orchestrated the laundering of over $80 million in digital assets, garnered through various deceptive crypto schemes.
Indictment Against Four for Money Laundering
The indictment, spanning seven counts, alleges that Zhang, Walker, Wong, and Zhu conspired to launder funds stemming from crypto investment scams and fraudulent activities, including schemes resembling pig butchering. Employing shell companies and bank accounts, they orchestrated the transfer of funds across both local and international financial institutions.
Pig butchering schemes entail scammers engaging in romantic relationships with unsuspecting victims on social media platforms with the primary intention of exploiting them financially. By feigning love and affection, scammers gain the trust of their targets and subsequently present opportunities for substantial profits through cryptocurrency investments.
While appearing legitimate, these investment platforms are linked to accounts controlled by scammers. After victims transfer their funds, the platforms are manipulated to create the illusion of significant gains on the purported investments, enticing targets to invest additional funds. Initially, victims may make minor withdrawals, but over time, they find it impossible to recover their money, resulting in substantial losses.
Through this modus operandi, the alleged perpetrators of the pig-butchering syndicate amassed over $80 million through at least 284 transactions, victimizing unsuspecting individuals. Approximately $20 million of the funds were directly funneled into bank accounts associated with the defendants.
Two in Custody
The charges leveled against these individuals include conspiracy to commit money laundering, money laundering concealment, and international money laundering. The DOJ disclosed that Zhang and Walker have been apprehended and have made their initial court appearances as of Wednesday. In the event of a conviction, the duo could potentially face a maximum sentence of up to 20 years in prison.
Simultaneously, law enforcement agencies in the U.S. have intensified efforts to combat crypto romance scams, a phenomenon on the rise. Earlier this year, the DOJ seized around $112 million in cryptocurrency from six accounts connected to pig butchering schemes, located in Los Angeles, the District of Arizona, and the District of Idaho.
Read more about: CryptoGuard: Unveiling the 2023 Hack Landscape