Four U.S. nationals have been charged with a series of money laundering offenses connected to a major “pig butchering” cryptocurrency scam that earned them more than $80 million.
The defendants – Lu Zhang, 36, of Alhambra, California; Justin Walker, 31, of Cypress, California; Joseph Wong, 32, Rosemead, California; and Hailong Zhu, 40, Naperville, Illinois – have been charged with conspiracy to commit money laundering, concealment money laundering, and international money laundering.
The U.S. Department of Justice (DoJ), which announced the arrests of both Zhang and Walker said the quartet opened shell companies and bank accounts to carry out pig butchering scams, transferring the funds to domestic and international financial entities.
If convicted, Zhang and Walker would face a maximum penalty of 20 years in prison.
According to the DoJ, the overall fraud scheme in the related pig-butchering syndicate involved at least 284 transactions and resulted in more than $80 million in victim losses. More than $20 million in victim funds were directly deposited into bank accounts associated with the defendants.
The enforcement action comes as a Nigerian national named Eze Harrison Arinze was sentenced to three years in prison for his role in conducting pig butchering scams and defrauding 34 victims in 13 countries, leading to $592,000 in losses.
Pig butchering is derived from a Chinese phrase, to signify the modus operandi of fraudsters who “fatten” their victims before going in for the kill. Typically, victims are approached out of the blue online, through unsolicited messages or on dating sites, with the scammer attempting to build a rapport to gain their trust.
Once they believe this has happened, they will suggest the victim invests in a cryptocurrency scheme. However, although the apps they gain access to might show them growing their investment, the funds are simply diverted to the scammer’s bank account, never to be seen again. By the time the victim realizes, it is too late.
Scammers could also delete their online presence or create new identities, making it difficult for victims to recover their lost funds.
Investment fraud was the highest earning cybercrime type in 2022, according to the FBI. Scammers made over $3.3bn from just over 30,000 reported incidents.
Image Credits : The Cyber Express
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