Chinese Nationals Arrested for Laundering $73 Million in Pig Slaughter Crypto Scam

The US Department of Justice (DoJ) has charged two arrested Chinese nationals for allegedly orchestrating a pig slaughter scam in which at least $73 million was evaded from victims through shell companies.

Daren Li, 41, and Yicheng Zhang, 38, were arrested in Atlanta and Los Angeles on April 12 and May 16, respectively.

The foreign nationals were accused of “leading a scheme to launder money of at least $73 million in connection with an international crypto investment fraud,” said Assistant Attorney General Lisa Monaco.

Prosecutors accuse Li, Zhang and their co-conspirators of leading an international syndicate that laundered funds obtained through cryptocurrency investment scams.

As part of the fraudulent operation, victims are said to have been tricked into transferring millions of dollars into US bank accounts that were opened in the name of various shell companies.

“A network of money launderers then facilitated the transfer of these funds to other domestic and international bank accounts and cryptocurrency platforms in a manner designed to conceal the source, nature, ownership and control of the funds,” the Justice Department said.

The funds are believed to have been laundered into bank accounts in the Bahamas through U.S. financial institutions and then converted into USDT or Tether and sent to cryptocurrency wallets, including one controlled by Li.

Specifically, Li and Zhang supervised lower-level co-conspirators who transferred the proceeds overseas to bank accounts at Deltec Bank in the Bahamas. At least one of the bank accounts was operated with Li’s financial support, with Zhang also directly receiving victim funds, according to the unsealed indictment.

Both were charged with conspiracy to commit money laundering and six substantive counts of international money laundering. If convicted, they each face up to 20 years in prison.

In pig slaughtering, scammers often approach lonely, wealthy victims via messaging apps, dating services and social media platforms to build trust and convince them to invest in various schemes that claim to offer better returns, only to then to transfer their money to the wallets underneath their control.

In December 2023, the US government announced indictments against four nationals for their alleged involvement in an illegal scheme that netted them more than $80 million through cryptocurrency investment scams.

Then last month, Google filed a lawsuit in the US against two app developers based in Shenzhen and Hong Kong, respectively, for flooding the Play Store with fake crypto apps to commit cryptocurrency theft using similar tactics.

Countries such as Burma, Cambodia, Laos, Malaysia, Myanmar and the Philippines have also become breeding grounds for romance scams, where unsuspecting people are often lured with the promise of lucrative jobs in order to be transported to so-called “scam factories” where they are coerced to take part in the operation.

A recent BBC News report detailed how a 24-year-old Sri Lankan recruited for a data entry job was taken to Myawaddy, a city in southeastern Myanmar, and forcibly detained in a camp run by “Chinese-speaking gangmasters.” .”

Furthermore, the person identified as Ravi (name changed) was tortured for refusing to participate, stripped of her clothes and given electric shocks on her legs.

“I spent 16 days in a cell because I disobeyed them,” he was quoted as telling the British broadcaster. “The only thing they gave me to drink was water mixed with cigarette butts and ashes.”

In another case, in August 2022, a 21-year-old from the Indian state of Maharashtra was abducted to Myanmar along with five other Indian men and two Filipino women, but was eventually released after paying a ransom.

INTERPOL has described the situation as an industrial-scale fraud fueled by human trafficking. The U.S. State Department condemned China-based organized crime syndicates for posing as labor brokers to recruit English-speaking people from Africa and Asia.

Two brothers arrested for stealing $25 million in novel crypto heist

The development comes as the Justice Department dropped 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 faces a maximum sentence of 20 years in prison on each count.

“The charges are based on an alleged novel plan by the defendants to exploit the integrity of the Ethereum blockchain to fraudulently obtain approximately $25 million in cryptocurrencies within approximately 12 seconds,” the Justice Department said.

The brothers, who studied at the Massachusetts Institute of Technology (MIT), allegedly used their skills to implement the novel plan in early April 2023, which involved a “first-of-its-kind manipulation” of the protocols underlying the Ethereum blockchain.

This allowed the defendants to fraudulently gain access to pending transactions, alter the movement of electronic currency, and ultimately obtain $25 million worth of cryptocurrencies through a series of transactions designed to conceal ownership of the stolen funds Directing US dollars from victims to their accounts.

“Anton Peraire-Bueno and James Pepaire-Bueno manipulated and manipulated the process and protocols by which transactions are validated and added to the Ethereum blockchain,” the Justice Department said, adding that they carried out the attack over several months. “meticulously planned”.

At the same time, they took steps to cover their tracks by concealing their identities and concealing their ill-gotten gains by setting up shell companies, private cryptocurrency addresses, and foreign cryptocurrency exchanges. The MEV Boost vulnerability, which was exploited to compromise the integrity of the Ethereum blockchain, has now been patched.

“The Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically advanced, cutting-edge scheme that they had planned for months and implemented in seconds,” Monaco said. “As cryptocurrency markets continue to evolve, the Department will continue to root out fraud, support victims, and restore trust in these markets.”