United States authorities have apprehended two individuals believed to be the masterminds behind a money laundering operation involving the funneling of over $73 million through U.S. financial institutions, ultimately converting the funds into Tether (USDT).
The Justice Department announced on Friday that Daren Li, aged 41, was arrested at Atlanta’s airport on April 12, while Yicheng Zhang, aged 38, was taken into custody in Los Angeles on Thursday. An indictment charging the pair was unsealed in a California court on Thursday, revealing their alleged roles in the scheme.
Li, Zhang, and their associates purportedly operated a transnational criminal network that laundered millions from 'pig butchering' crypto scams. These scams typically involve fraudsters gaining victims’ trust, convincing them to invest large sums, and then disappearing with the funds.
The defendants allegedly directed co-conspirators to open U.S. bank accounts under the names of shell companies. Victims were persuaded to transfer millions of dollars into these accounts, which were then exploited to launder the illicit funds.
According to the Department of Justice, the laundered money was dispersed to various domestic and international bank accounts. The DOJ stated, "The fraud scheme involved more than $73 million laundered through U.S. financial institutions to bank accounts in the Bahamas and converted to the virtual asset USDT, or Tether. A cryptocurrency wallet involved in the scheme received more than $341 million in virtual assets."
Daren Li and Yicheng Zhang are facing charges of conspiring to launder money and six counts of international money laundering. If convicted, they could potentially face a maximum sentence of 20 years imprisonment for each count, amounting to a total of 140 years behind bars.
Deputy Attorney General Lisa Monaco, in a statement, acknowledged the challenges posed by cryptocurrency fraud but emphasized the commitment to holding perpetrators accountable.
Pig butchering scams have become lucrative for online criminals, with the United States Justice Department seizing $9 million from a scheme in November 2023 that targeted over 70 U.S. citizens. The increasing frequency and severity of these scams have raised concerns among lawmakers and regulators, prompting heightened efforts to curb crypto-related fraud in the market. While these efforts aim to protect investors and safeguard digital assets, some regulations may pose challenges to the sector's development.
May 2024, Cryptoniteuae