Three individuals—Zhong Shi Gao, Naifeng Xu, and Fei Jiang—have been accused by the U.S. Department of Justice of laundering over $10 million in cryptocurrency. If found guilty, these individuals might face a maximum of 30 years in federal prison, as revealed by the United States Attorney for the Southern District of New York in an announcement made on Thursday.
The scheme orchestrated by the trio involved a complex network. Foreign nationals from China and Taiwan living in the United States were recruited to open bank accounts, which were then handed over to the defendants. Subsequently, the alleged scammers would create transactions, claim these transactions were unauthorized, prompting the banks to credit their accounts. Following this, the funds would either be withdrawn as cash or used to buy cryptocurrency, swiftly shifted to “foreign” cryptocurrency exchanges.
FBI Assistant Director James Smith condemned the actions, emphasizing the damage caused to institutions and the increased difficulty in reporting suspicious transfers due to such schemes. He warned potential wrongdoers, stating that the arrests serve as a cautionary tale for anyone contemplating bank fraud, reassuring that the FBI would ensure accountability within the criminal justice system.
The apprehension of Gao, Xu, and Jiang was made possible through a joint operation conducted by the FBI’s Oklahoma City field office and the bureau’s Asian and African Organized Crime squad. Each defendant faces three charges, including conspiracy to commit bank and wire fraud, money laundering, and identity theft. The trial for the accused individuals will be presided over by U.S. District Judge Colleen McMahon.
The investigation sheds light on the increasing complexity and international nature of financial crimes involving cryptocurrencies, emphasizing the collaborative efforts required among law enforcement agencies to combat such fraudulent activities.