$13M+ 'Pig Butchering' Scheme Leads To Arrest Of 2 Chinese Nationals

ORANGE COUNTY, CA — Three people, including two Chinese nationals, were arrested Tuesday on federal charges of participating in a "pig butchering" scam that stole about $13 million from victims, the U.S. Department of Justice announced.

Los Angeles residents Mingzhi Li, 24, and Zeyue Jia, 23, were arrested along with San Gabrial resident, 55-year-old Jun Shi.

Li and Jia were ordered jailed without bond and Shi was released on $20,000 bond, according to the department.

The three men are charged with operating an unlicensed money transmitting business and are scheduled for an arraignment March 17 in federal court in Los Angeles.

According to an FBI affidavit in the case, the victims complained they sent money to shell companies Magic Location Tradic LLC and Stone Water Trading LLC, both based in Los Angeles.

Shi and Li were involved in establishing Magic Trading and Shi and Jia were involved in setting up Stone Water, the FBI said.

Numerous victims were targeted in what authorities call a "Pig Butchering Scheme," in which "scammers use various social media and dating platforms to meet victims or send unsolicited messages through mobile telephone applications to start conversations," according to the FBI.

"Through these conversations, scammers gradually build relationships and indirectly get victims interested in virtual currency investments."

According to the criminal complaint, the victims are lured into fake investments involving gold contracts or digital currency such as Bitcoin. The victims are then fooled by "spoofed websites" that make it appear as though they are earning a profit.

One Irvine man invested $490,000 and was told he earned profits, but to withdraw the money he had to pay roughly $800,000, which he did, the FBI said. The victim claimed he was initially contacted by text message from a woman he didn't know who struck up a conversation with him, the criminal complaint said.

The man made eight wire transfers to the scam account for $1.4 million and never received his money, the FBI alleged.

Another woman in Irvine was contacted by a scammer who claimed he had dialed the wrong number and befriended her, the FBI alleged. She lost $500,000, the FBI said.

A 75-year-old Irvine man told the FBI he was contacted through Facebook messenger, the FBI said. He was caring for his wife who was on hospice care in his home at the time and the scammer persuaded him to invest to earn more money to care for his wife, the FBI alleged.

The victim lost $20,155.18 in one wire transfer in September 2023, the FBI said.

Investigators identified 242 wire transfers to Stone Water totaling about $7.6 million and 60 wire transfers to Magic Trading for about $5.4 million, federal prosecutors alleged. That money was sent to overseas bank accounts and other businesses, prosecutors said.

City News Service contributed to this report.