Multimillion-Dollar Crypto Scams Busted; 2 Charged With Laundering $73 Million: Officials

TEMPLE CITY, CA — Two men, including one from Los Angeles County, face federal money laundering charges in California after they laundered at least $73 million through shell companies tied to cryptocurrency investment scams, authorities said.

Daren Li, 41, and Yicheng Zhang, 38, are both charged with conspiracy to commit money laundering and six counts of international money laundering, according to the U.S. Department of Justice.

“Cryptocurrency investment scams exploit the borderless nature of virtual currency and online communications to defraud victims,” Deputy Attorney General Lisa Monaco said in a news release. “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.”

Zhang, a Chinese national and resident of Temple City, was arrested Thursday in Los Angeles, according to the department. Li — a dual citizen of China and St. Kitts and Nevis and a resident of China, Cambodia and the United Arab Emirates — was arrested in April at Hartsfield-Jackson Atlanta International Airport and taken to California, authorities said.

The men and others managed an international syndicate that fraudulently induced victims to transfer millions of dollars to U.S. bank accounts for shell companies, which launderers then moved to other accounts and cryptocurrency platforms, according to authorities. This is called pig butchering, authorities said. More than $73 million was laundered to accounts in The Bahamas and converted to the cryptocurrency Tether, according to the department.

If convicted, Li and Zhang face up to 20 years in prison on each count, authorities said.

To report cryptocurrency investment fraud, visit IC3.gov and reference “Pig Butchering PSA” in the complaint, authorities said. Include as much information as possible, such as names of investment platforms, cryptocurrency addresses, transaction hashes, bank accounts, and names and contacts for scammers, according to authorities. Keep copies of communications with scammers and transaction records, authorities said.