Four individuals have been charged by the Department of Justice for their alleged roles in a scheme designed to launder millions in proceeds of a cryptocurrency investment scam, according to a recently unsealed indictment.
Over $80 million stolen
According to a Thursday press release from the Department of Justice, Lu Zhang, Justin Walker, Joseph Wong, and Hailong Zhu have been charged with conspiracy to commit money laundering, concealment of money laundering, and international money laundering. Zhang, Walker, and Wong all reside in California, while Zhu is a resident of Illinois.
The group of four is said to have masterminded a massive “pig butchering” scam, wherein perpetrators convince victims to trust them by building what seems to be a legitimate relationship with them in order to gain access to their accounts.
The accused are said to have opened a number of shell companies and various bank accounts in order to transfer victim proceeds both domestically and internationally.
According to the DOJ’s press release, the scheme consisted of 284 transactions and resulted in over $80 million in victim losses.
Pig butchering schemes are rising in prominence
Thursday’s unsealed indictment is just the latest in a wave of pig butchering scams that have been sweeping the nation.
In April, the Department of Justice announced it had seized an estimated $112 million from cryptocurrency accounts tied to pig butchering schemes.
In September, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) released an alert warning the American public about the prominence of pig butchering scams.
Upon establishing trust with a victim, scammers are able to leverage their influence over their target by conning them into depositing their funds in what appears to be a safe investment.
“Once a victim acquires virtual currency, the scammer directs them to “invest” the funds through the investment websites or applications, although the funds are funneled to virtual currency addresses and accounts controlled by scammers and their co-conspirators,” FinCEN’s alert reads.
“Once funds are sent to scammer-controlled accounts, the investment platform often falsely shows significant gains on the purported investment, and the victims are thus induced to make additional investments,” states Thursday’s press release from the Department of Justice. “Ultimately, the victims are unable to withdraw or recover their money, often resulting in significant losses for the victims.”
What to expect going forward
Two of the accused, Zhang and Walker, made their first appearances in federal court yesterday.
If convicted, both are facing a maximum total sentence of two decades in prison.
It is currently unclear what, if any, financial restitution will be made.
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