Four people charged with money laundering in $80 million pig butchery scheme

Four men were accused in US federal court for their alleged involvement in a so-called pig butchery scheme that stole more than $80 million from unwitting victims.

According to the Justice Department, three California residents: Lu Zhang, 36; Justin Walker, 31; and Joseph Wong, 32 – along with Illinois resident Hailong Zhu, 40, are charged with “conspiracy to commit money laundering, concealing money laundering and international money laundering “.

Zhang and Walker were arrested Tuesday and appeared in a Los Angeles district court, while their alleged co-conspirators remain at large. The four men are accused of opening shell companies and bank accounts to launder cryptocurrency purchased via the network. pig butchery scamswhere fraudsters form relationships with their victims on social media, dating sites or messaging platforms.

“Scammers build relationships with victims and slowly gain their trust, eventually introducing the idea of ​​making a business investment using cryptocurrency,” the DOJ wrote.

After victims made an “investment” through fraudulent platforms controlled by the scammers, it initially appeared that they were making a profit.

“Ultimately, victims are unable to withdraw or recover their money, often resulting in significant losses for victims,” the DOJ wrote. According to the indictment, victims were also targeted with tech support scams as part of this scheme.

Zhu allegedly registered two shell companies called Sea Dragon Trading and Sea Dragon Remodel. Between September 2022 and March 2023, he and his co-conspirators allegedly funneled money through accounts with JPMorgan Chase and Bank of America, which were linked to the shell companies.

At least 284 transactions were made through these scams, with more than $20 million “directly deposited into bank accounts associated with the defendants.”

Zhang and Walker face up to 20 years in prison.

In 2022, according to the FBIInvestment fraud caused the highest losses of all types of scams in the United States.

“Frauds involving cryptocurrency, including pig butchery, accounted for most of these scams, increasing 183% from 2021 to $2.57 billion in reported losses last year,” the report said. The DOJ wrote. In April, the agency announced the seizure of more than $112 million related to cryptocurrency investment fraud.

The investment scam industry has transformed into a global threat, along with organized crime syndicates. exploit fraudulent compounds throughout Southeast Asia and the industry extends to South America, Interpol recently warned.

At the beginning of December, a Nigerian has been condemned by the country’s Federal High Court to three years in prison for pig butchery fraud, using a fraudulent investment platform to defraud victims in 13 countries – including the United States, Germany, India and South Africa – of more than half a million dollars.

James Reddick has worked as a journalist around the world, including in Lebanon and Cambodia, where he was deputy editor of the Phnom Penh Post. He is also a radio and podcast producer for outlets like Snap Judgment.