The Justice Department prosecuted two Chinese nationals on Friday in a cryptocurrency scam that laundered at least $73 million from deceived victims.

Defendants Allegedly Used Shell Corporations to Launder Funds Through US Banks and Bahamas Accounts

Yicheng Zhang was arrested in Los Angeles on Thursday, according to an indictment that was later unsealed in US District Court in California's central district. Daren Li, a dual citizen of China and St. Kitts and Nevis, was apprehended at the Atlanta Airport in April, The New York Post reported.

The United States accused the two of being involved in pig butchering, a form of Bitcoin investment scam that has grown into a global billion-dollar industry.

The defendants are accused of instructing co-conspirators to open US bank accounts using the names of shell corporations.

Victims were duped online into sending funds into these accounts, which were then laundered through US financial institutions to bank accounts in the Bahamas.

Justice Department Commits to Disrupting Crypto Fraud and Holding Perpetrators Accountable

“Cryptocurrency investment scams exploit the borderless nature of virtual currency and online communications to defraud victims. While fraud in the crypto markets takes on many forms and hides in many far-off places, its perpetrators aren’t beyond the law’s reach. Today, we announce the arrests of two foreign nationals charged for leading a scheme to launder funds to the tune of at least $73 million tied to an international crypto investment scam. These arrests — made possible through the assistance of our international and U.S. partners — reflect the Justice Department’s ongoing commitment to disrupting the entire cybercrime ecosystem and stopping fraud across all financial markets,” US Deputy Attorney General Lisa Monaco said in a statement.

U.S. Attorney Martin Estrada for the Central District of California stated that sophisticated financial frauds like these pose a serious threat to the financial security of all Americans. While his office will continue to investigate and prosecute these deceptive schemes, Estrada invites everyone to educate themselves about pig butchery and other forms of financial fraud in order to protect their family from such predatory behavior.

“As alleged in the indictment, Li and Zhang helped launder millions of dollars obtained from victims of cryptocurrency investment scams. Money laundering is critical to the success of these scams, allowing fraudsters to quickly move illicit proceeds and try to make them appear legitimate. The arrests announced today demonstrate the Criminal Division’s commitment to disrupting the sophisticated financial networks on which these scams depend and holding those involved accountable, no matter where they may be found,” Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, stated.

Li and Zhang have been charged with conspiracy to commit money laundering and six counts of international money laundering.

If convicted, the defendants may face up to 20 years in prison on each count, according to the Justice Department.

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