Chinese national admits to laundering crypto scam loot via US companies

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As a seasoned researcher who has spent years delving into the intricacies of financial crimes and their perpetrators, this case of Daren Li stands out as yet another reminder of the relentless, global nature of cybercrime. It’s fascinating how these criminals, armed with little more than a computer and a clever scheme, can wreak havoc on unsuspecting victims across continents.

A person from China has admitted their guilt for washing $73 million, which was connected to fraudulent cryptocurrency schemes, by using numerous front corporations within the U.S.

As stated in a November 12 announcement by the Department of Justice, Daren Li, who holds citizenship in both China and St. Kitts and Nevis, has confessed to conspiring to launder approximately $73 million. This money was accumulated through various investment fraud schemes, including pig butchering crypto operations, to which he admitted his participation.

From August 2021 to April 2024, Li and his partner intentionally carried out transactions involving money derived from wire fraud. This was detailed in an agreement signed for the court in California.

Li confessed that he directed his co-conspirators to establish numerous U.S. bank accounts using fictitious corporations as fronts. The illicit funds obtained from victims were then moved into these accounts, with Li and Yicheng Zhang, a Chinese national based in California, managing all the financial transactions.

After securing the finances, Li transferred the funds into accounts under his management. Subsequently, he exchanged these funds for digital currencies such as Tether, which were spread across several wallets handled by him and his associates.

Of the total $73.6 million that the suspect confessed to laundering, approximately $59.8 million was routed via U.S.-based shell corporations, leaving the rest, which was linked to the scheme, to be deposited directly into relevant bank accounts.

In May, Li and Zhang faced charges from the DOJ. Upon investigation, it was discovered that several international accounts related to their case were created at Deltec Bank located in The Bahamas. Furthermore, a digital wallet associated with this matter received approximately $341 million in cryptocurrencies.

In the U.S., both Li and Zhang were taken into custody, yet only Li has admitted guilt and is now anticipating sentencing scheduled for March 3, 2025.

In the plea agreement, it’s stated that Li could potentially serve a maximum term of 20 years in prison, followed by three years under supervised release. The fine could amount to either $500,000 or twice the total profit or loss caused by the offense. Additionally, he might be required to fully compensate the victims for their losses.

Global victims have collectively lost approximately $75 billion from pig butchering scams, which were active between January 2020 and February 2024. These frauds usually begin with the swindlers establishing trust with their targets, eventually persuading them to make substantial investments in questionable ventures, frequently involving cryptocurrencies.

2023 data from an FBI report indicates that people aged 60 and above were the group most susceptible to scams, filing the greatest number of complaints and suffering total losses amounting to over $1.6 billion.

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2024-11-13 14:56