The U.S. Department of Justice (DoJ) has charged two Chinese nationals, Daren Li, 41, and Yicheng Zhang, 38, for allegedly orchestrating a “pig butchering” scam that laundered at least $73 million through shell companies. Li was arrested in Atlanta on April 12, while Zhang was apprehended in Los Angeles on May 16.
Deputy Attorney General Lisa Monaco stated, “The individuals have been charged for leading a scheme to launder funds to the tune of at least $73 million tied to an international crypto investment scam.” Prosecutors allege that Li, Zhang, and their co-conspirators managed an international syndicate that laundered funds obtained via cryptocurrency investment scams.
Victims were deceived into transferring millions to U.S. bank accounts opened under various shell companies. A network of money launderers then transferred these funds to other domestic and international bank accounts and cryptocurrency platforms to conceal their source, nature, ownership, and control.
The funds were laundered through U.S. financial institutions to accounts in the Bahamas, subsequently converted to USDT (Tether), and sent to cryptocurrency wallets, including one controlled by Li. Li and Zhang reportedly oversaw lower-level co-conspirators who moved the proceeds to Deltec Bank accounts in the Bahamas. Li directly assisted in managing these accounts, while Zhang received victim funds.
Both men face charges of conspiracy to commit money laundering and six counts of international money laundering, each carrying a potential 20-year prison sentence.
Pig butchering scams involve fraudsters using messaging apps, dating services, and social media to build trust with victims, eventually convincing them to invest in fraudulent schemes. The money is then transferred to wallets controlled by the fraudsters.
In December 2023, the U.S. government charged four other nationals in a similar crypto investment scam that netted over $80 million. Last month, Google sued two app developers from Shenzhen and Hong Kong for distributing bogus crypto apps on the Play Store to steal cryptocurrency.
Countries such as Burma, Cambodia, Laos, Malaysia, Myanmar, and the Philippines have become hotspots for romance scams, often luring people with promises of lucrative jobs, only to coerce them into participating in fraudulent operations in “scam factories.”
A BBC News report highlighted the plight of a 24-year-old Sri Lankan, “Ravi,” who was recruited for a data entry job but detained in a Myanmar camp run by Chinese-speaking gangmasters. Ravi endured torture, including being stripped and given electric shocks, for refusing to comply with the scammers.
In another case, a 21-year-old from Maharashtra, India, was trafficked to Myanmar with five Indian men and two Filipino women in August 2022. They were eventually released after paying a ransom.
INTERPOL describes this situation as human trafficking-fueled fraud on an industrial scale. The U.S. Department of State condemned China-based organized crime syndicates for posing as labor brokers to recruit English-speaking individuals from Africa and Asia.
Two Brothers Arrested for Stealing $25M in Novel Crypto Heist
Separately, the DoJ unsealed an indictment against Anton Peraire-Bueno, 24, of Boston, and James Pepaire-Bueno, 28, of New York, on charges of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. Each count carries a potential 20-year prison sentence.
The charges stem from an alleged scheme exploiting the Ethereum blockchain to fraudulently obtain approximately $25 million within seconds. The brothers, who studied at MIT, reportedly manipulated the blockchain protocols to access pending transactions, redirecting $25 million in cryptocurrency to their accounts through a series of obscured transactions.
The DoJ noted that the brothers meticulously planned the attack over several months, concealing their identities and hiding the stolen funds through front companies, private cryptocurrency addresses, and foreign exchanges. The exploited MEV-Boost vulnerability has since been patched.
Monaco commented, “The Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds. As cryptocurrency markets evolve, the Department will continue to root out fraud, support victims, and restore confidence in these markets.”
