Four alleged perpetrators of a massive crypto investment scam are facing potential jail time of up to 20 years following their indictment on Wednesday.
According to the U.S. Department of Justice (DOJ), Lu Zhang of Alhambra, California, Justin Walker of Cypress, California, Joseph Wong of Rosemead, California and Hailong Zhu of Naperville, Illinois conspired to open shell companies and bank accounts to launder the proceeds of a “pig butchering” crypto investment scam and other fraudulent schemes.
Scammers involved in pig butchering schemes send unsolicited messages to their targeted victims, often on dating sites and social media, to build relationships with the aim of introducing purported crypto investment opportunities on fraudulent sites and applications that they operate.
The victims who were convinced to invest would initially see significant gains in their accounts, which could induce them to send more money, but they would eventually be unable to withdraw or recover their funds.
The DOJ says that Zhang, Walker, Wong and Zhu transferred the ill-gotten funds to domestic and international institutions in a scheme that involved at least 284 transactions and more than $80 million in victim losses. They also allegedly deposited $20 million of the ill-gotten funds directly into their own bank accounts.
“A seven-count indictment was unsealed yesterday in Los Angeles charging four individuals for their alleged roles in a scheme to launder the proceeds of cryptocurrency investment scams and other fraudulent schemes involving millions of dollars in victim funds.”
All four are facing charges of conspiracy to commit money laundering, concealment of money laundering and international money laundering.
Zhang and Walker have already made their initial appearances in federal court following their arrest on Wednesday.
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