US DOJ Charges 4 Individuals for Laundering Over $80M From Crypto Investment Scams

The United States Justice Department (DOJ) has charged four people for their alleged roles in laundering millions of dollars from cryptocurrency investment scams.

According to a press release from the DOJ, the four individuals, 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, laundered more than $80 million worth of digital assets from different types of fraudulent crypto schemes.

4 Individuals Charged for Laundering Millions

The seven-count indictment accused Zhang, Walker, Wong, and Zhu of conspiring to launder proceeds from crypto investment scams and fraudulent schemes like pig butchering. They moved the funds to local and international financial institutions through shell companies and bank accounts.

Pig butchering schemes involve scammers initiating romantic relationships with victims on social media platforms with the sole aim of exploiting them financially. They usually profess love and affection to gain the trust of their targets and eventually propose opportunities to make high profits through crypto investments.

While they may seem legit, the purported investment platforms are linked to scammer-controlled accounts. After the victims send their funds, the platforms are tweaked to look like they are making significant gains on the purported investments, inducing the targets to invest more money. The victims may be able to make small withdrawals at first, but with time, they will be unable to recover their money, leading to massive losses.

With this strategy, the alleged fraudsters’ pig-butchering syndicate made over $80 million from unsuspecting victims in at least 284 transactions. About $20 million in victim funds were directly deposited into bank accounts linked to the defendants.

2 Arrested

The individuals are charged with conspiracy to commit money laundering, concealment of money laundering, and international money laundering. The Justice Department revealed that Zhang and Walker have been arrested and made their first appearances in court on Wednesday. The duo could face up to 20 years in prison if found guilty.

Meanwhile, U.S. law enforcement agencies have doubled their crackdown on crypto romance scams, which are rapidly rising in popularity. Earlier this year, the DOJ seized around $112 million in cryptocurrency from six pig butchering-linked accounts based in Los Angeles, the District of Arizona, and the District of Idaho.