Chinese national admits to laundering crypto scam loot via US companies

The Chinese national pleaded guilty to laundering $73 million related to crypto fraud through multiple shell companies in the United States.

According to the announcement made by the Ministry of Justice on November 12, China and St. Defendant Daren Li, a dual citizen of St. Kitts and Nevis, pleaded guilty to conspiracy to commit money laundering, pleading guilty to conspiracy to commit money laundering. Investment scams, including crypto schemes to slaughter pigs.

Between August 2021 and April 2024, Li and his accomplice “knowingly” conducted transactions using funds “representing the proceeds of wire fraud,” according to a plea agreement in California federal court.

Li admitted that he instructed his accomplices to open multiple U.S. bank accounts under fake shell companies. Funds from the victims were transferred to these accounts, with Li and his partner Yicheng Zhang, another Chinese national residing in California, overseeing all transactions.

Once the funds were available, Li transferred the money to accounts under his control. He then converted the funds into cryptocurrencies such as Tether, which were distributed to various wallets managed by him and his accomplices.

While $59.8 million of the $73.6 million that the defendant admitted to laundering was transferred through shell companies in the United States, the remaining amount was deposited directly into bank accounts linked to the scheme.

Li and Zhang were first charged by the Department of Justice in May. At that time, the regulator found that several relevant international accounts were created at Deltec Bank in the Bahamas. Meanwhile, a crypto wallet linked to the case was found to have received more than $341 million in cryptocurrencies.

Both Li and Zhang were arrested in the United States, but only Li pleaded guilty and is currently awaiting sentencing, set for March 3, 2025.

The plea agreement said Li faces a maximum sentence of 20 years in prison, three years of supervised release and a fine of $500,000 or “twice the gross gain or gross loss resulting from the crime.” It may also be ordered to pay full compensation to the victims.

Pig slaughter scams generated more than $75 billion from victims around the world between January 2020 and February 2024. These scams often begin with scammers gaining trust in their targets, eventually convincing them to invest heavily in questionable deals that often involve cryptocurrencies.

An FBI report found that individuals over the age of 60 appear to be the most vulnerable demographic, reporting the most claims, with collective losses exceeding $1.6 billion in 2023.

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