Four Individuals Face U.S. DOJ Charges for Alleged $80M Laundering in Crypto Investment Scams

The U.S. Department of Justice (DOJ) has brought charges against four individuals for their alleged involvement in laundering over $80 million from cryptocurrency investment scams. The accused are Lu Zhang of Alhambra, California; Justin Walker of Cypress, California; Hailong Zhu of Naperville, Illinois; and Joseph Wong of Rosemead, California, aged 36, 31, 40, and 32, respectively.

The seven-count indictment alleges that Zhang, Walker, Wong, and Zhu conspired to launder funds obtained from various fraudulent cryptocurrency investment schemes, including a type known as “pig butchering.” They funneled these ill-gotten gains through both local and international financial institutions, employing shell companies and bank accounts for this purpose.

“Pig butchering” schemes involve scammers establishing romantic relationships with victims on social media platforms to exploit them financially. These scammers feign love and affection to gain their victims’ trust and eventually propose investment opportunities in cryptocurrencies that promise significant profits.

While these investment platforms may appear legitimate, they are connected to accounts controlled by scammers. After victims invest their funds, the platforms are manipulated to create the illusion of substantial gains, encouraging victims to invest more. Initially, victims may be able to make small withdrawals, but ultimately, they lose their money, resulting in substantial losses.

Through this scheme, the alleged fraudsters’ pig butchering syndicate accumulated over $80 million from unsuspecting victims through approximately 284 transactions. Approximately $20 million of victim funds were directly deposited into bank accounts linked to the defendants.

The charges against the individuals include conspiracy to commit money laundering, money laundering concealment, and international money laundering. Zhang and Walker have already been arrested and appeared in court on Wednesday. If found guilty, they could face up to 20 years in prison.

Furthermore, U.S. law enforcement agencies have intensified their efforts to combat crypto romance scams, which have seen a rapid increase in popularity. Earlier this year, the DOJ seized approximately $112 million in cryptocurrency from six accounts associated with pig butchering schemes located in Los Angeles, the District of Arizona, and the District of Idaho.

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