Three Men Arrested By FBI In Alleged Crypto Laundering Scheme

Three Men Arrested By FBI In Alleged Crypto Laundering Scheme

On Thursday, the United States Attorney for the Southern District of New York announced charging three men for crypto laundering worth $10 million.

If the three men are found guilty of the charge, they would be facing a prison sentence of a maximum of 30 years.

The individuals

Fei Jiang, Naifeng Xu, and Zhong Shi Gao were charged with the money laundering scheme by the US Department of Justice (DOJ).

James Smith, the FBI Assistant Director, said that these schemes tend to harm institutions and also make it difficult to report suspicious transfers.

He went on to say that the latest arrests were a warning to those who might be thinking about engaging in bank fraud. He said that anyone who does so will be held accountable in the criminal justice system.

The Oklahoma City field office of the FBI and the Asian and African Organized Crime squad of the bureau came together to conduct a joint operation to apprehend the three individuals.

Three charges have been filed against each individual, which includes conspiracy to commit wire and bank fraud, identity theft and money laundering.

The DOJ also revealed that the trial of the three individuals would be handled by US District Judge Colleen McMahon.

The scheme

The crypto laundering scheme involved enlisting foreign nationals from Taiwan and China who were residing in the United States.

They were asked to open bank accounts and then hand them over to the three individuals, who would then conduct transactions and later claim that the said transactions were unauthorized.

The banks would then credit their accounts and they would withdraw the money quickly as cash or use it for buying crypto that was then shifted to foreign crypto exchanges quickly.

More details

Damian Williams, a US Attorney, said that the charges were a warning for cybercriminals and fraudsters who were using crypto to hide their identities.

He said that they would find these individuals to ensure accountability for their crimes with the help of their partner agencies.

Williams is quite familiar with crypto crimes, as he prosecuted members of the infamous OneCoin scam. Last week, Irina Dilkinska, the Head of Legal and Compliance at OneCoin, was also prosecuted.

Williams also played a key role in the arrest and trial of Sam Bankman-Fried, the co-founder of the FTX crypto exchange, along with his co-conspirators.

Since FTX collapsed and Bankman-Fried was arrested last year, federal regulators have been monitoring the crypto space with a heavier hand.

Bankman-Fried’s trial also came to an end recently in which he was found guilty of seven charges of fraud and conspiracy.

The Department of Justice (DOJ) also indicted SafeMoon’s founders earlier this month on charges of conspiracy to commit money laundering and wire and securities fraud.

Massachusetts Senator Elizabeth Warren said that ransomware gangs, drug lords, fraudsters, and rogue nations to launder billions.

She added that they were also using crypto to evade sanctions, take advantage of cyberattacks, and fund weapons programs.

Therefore, she has introduced a Digital Asset Anti-Money Laundering Act aimed at applying traditional banking regulations to the crypto industry.