Two Chinese nationals have been charged in connection with a sophisticated international money laundering scheme that funneled proceeds from cryptocurrency investment scams.
The indictment accuses Daren Li, 41, and Yicheng Zhang, 38, of playing pivotal roles in a network that laundered over $73 million through US financial institutions to accounts in The Bahamas and converted into the cryptocurrency Tether.
Daren Li, a dual citizen of China and St. Kitts and Nevis, was apprehended on April 12 at Hartsfield-Jackson Atlanta International Airport. Li, who has residences in China, Cambodia, and the United Arab Emirates, was subsequently transferred to the Central District of California. Yicheng Zhang, a Chinese national residing in Temple City, California, was arrested yesterday in Los Angeles.
According to court documents, Li, Zhang, and their accomplices orchestrated an elaborate syndicate that managed the proceeds from “pig butchering” scams—a type of investment fraud (often in cryptocurrencies) that lures individuals into investing their money in seemingly legitimate and profitable ventures.
Typically, scammers promise substantial investment returns in a short period. Pig-butchering scammers often employ fake images and impressive but fraudulent investment portfolios to convince victims of their schemes' legitimacy. Once victims are hooked and have invested significant amounts of money, the scammers vanish, leaving the victims with no way to recover their funds.
The scheme involved a network of money launderers who facilitated the movement of funds through domestic and international channels. The laundered money was transferred to bank accounts in The Bahamas, including those at Deltec Bank, where the funds were converted into cryptocurrency and sent to virtual-asset wallets. One such wallet, which received over $341 million in virtual assets, was controlled by Li.
Li and Zhang allegedly directed their co-conspirators to open numerous bank accounts under fake company names. They then monitored the lower-level operatives responsible for transferring the fraud proceeds overseas.
Both Li and Zhang face charges of conspiracy to commit money laundering and six substantive counts of international money laundering. If convicted, they could each face up to 20 years in prison for each count.